What is the forecast for USD/CAD by mid-year and by year-end?
Here is their view, courtesy of eFXdata:
CIBC Research discusses CAD outlook and targets USD/CAD at 1.24 by mid-year and at 1.27 by year-end.
“Given higher levels of crude than previously assumed, and the persistence in the CAD’s correlation with movements in the broader USD index, we now see scope for an appreciation in the C$ over the next few months, with USDCAD expected to sit near 1.24 at midyear, and likely testing even lower levels in the interim,” CIBC notes.
“Simply put, momentum trading and enthusiasm for commodities currencies could swamp longer-term fundamentals, including a chronic trade deficit, that suggest that the C$ is already too rich for the economy’s blood,” CIBC adds.
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