CAD: Hyped recovery from recent wildfires is now well underway - Westpac

Research Team at Westpac, suggests that a punchy 0.6% rise in June GDP confirms the much hyped recovery from recent wildfires is now well underway (the BoC assumes 3.5% for Q3 GDP).

Key Quotes

“Trudeau's fiscal stimulus kicks in Q4 too and Canada's terms of trade hit is moderating as oil spends more time in higher ranges ($40-$50) than seen earlier this year. The BoC likely sticks to a cautious neutral view 7 Sep. USD/CAD a sell into the late July 1.3250 highs if seen.

Technical: Range support has been redefined after the spike to 1.2760-65 (61.8% of the range since early May). USD/CAD looks set to push towards range/retracement resistance in the 1.3245-1.3315 area. 1.3065 may act as an interim pivot as the consolidation range is further defined with support likely in the term at 1.2950.”