USD/CAD to End 2016 at 1.30 - Lloyds
Analysts from Lloyds Bank, expect the USD/CAD to rise toward 1.35, but then as crude oil recovers is forecast to end the year at 1.30.
Key Quotes:
“Similar
to other commodity currencies, USD/CAD has been rangebound recently –
trading between 1.28 and 1.33. The currency pair has been influenced by
the shifting tone of US officials. Chair Yellen has been relatively
dovish, although other members (including Bullard, Rosengren and George)
have been more upbeat.”
“Oil prices also remain an important
driver - Brent has rallied back above $40/bbl after recent API and US
DoE data releases showed unexpected drawdowns in inventories. The
Canadian economic outlook remains positive, with GDP and retail sales
both beating consensus expectations in March.”
“Given the
fundamental backdrop, we expect the BoC to maintain its current policy
stance at April’s meeting, with Governor Poloz’s likely to maintain an
optimistic tone.”
“In the short term, given our expectation of a
rate hike from the Fed in June, we anticipate a retracement in USD/CAD
to 1.35. But subsequently, CAD should receive more sustained support
from rising oil prices. Our base case is for oil prices to rise towards
$55/bbl and for USD/CAD to trade to 1.30 by end-2016.”
(Market News Provided by FXstreet)
