USD/CAD to drop considerably towards 1.20 in the next weeks – Standard Chartered

Economists at Standard Chartered expect the USD/CAD downtrend to continue towards 1.20 over the coming weeks.  

Key quotes

“Further USD strength could be seen if bond yields edge higher, but we continue to suggest averaging into short USD positions.”

“Provided we have no further pandemic setback, the counter-cyclical USD should fall and currencies such as the AUD, NZD and CAD should continue to appreciate.”

“With the expected US recovery package and anticipated infrastructure bill thereafter, the US-centric Canadian economy should outperform as it concurrently ramps up its domestic vaccination programme. This should be a catalyst for the USD/CAD downtrend to continue towards 1.2000 in the coming weeks, while technical resistance around 1.2880 likely caps any short-term bounce.”