USDCAD: On the verge of breaking out of a six-month trading range - Westpac

Richard Franulovich, Research Analyst at Westpac, suggests that an OPEC announcement could not have come at a better time for USD/CAD – the pair was on the verge of breaking out of a six-month trading range.

Key Quotes

“But, even after backing away from a potentially meaningful breakout USD/CAD remains stronger than oil prices warrant suggesting a sizeable risk premium around a potential Trump presidency. At this stage though we would view a Trump presidency as a tail risk, putting the focus back on what still looks to be a very strong H2 Canadian growth picture.

The bounce back from wildfire disruptions has barely begun while Trudeau’s fiscal easing will deliver a fresh tailwind from Q4 and well into 2017.

On balance still feel selling USD/CAD remains the more rewarding trade, even with the BoC’s mild easing bias.”