USD/CAD Downside Below 1.25 Unlikely – Westpac
According to Strategist at Westpac Richard Franulovich, further losses south of 1.25 appear unlikely.
Key Quotes
“USD/CAD
momentum remains lower especially given the break of 1.2850, a critical
technical threshold that should unlock further losses. Hard to see the
pair trade materially south of 1.25 though”.
“Much depends on the Doha oil producers meeting where a lot of “good news” is discounted”.
“Gov
Poloz sounded more cautious than one might have assumed given the
Trudeau fiscal stimulus, indeed he noted absent the stimulus that the
Bank would have had a rate cut bias”.
“CAD longs should find
greater mileage owning the currency against the likes of AUD and NZD,
rates markets more consistently leaning toward pricing in RBA and RBNZ
rate cuts, and oil prices looking more likely to sustain gains than iron
ore, the latter showing substantially less supply-side adjustment
progress”.
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