USDCAD: Dip Towards 1.19/20 a Nontrivial Risk in the Interim - TDS
USDCAD: Dip Towards 1.19/20 a Nontrivial Risk in the Interim - TDS
Research Team at TDS, suggests that tracking for Q1 real GDP growth
continues to run ahead of the Bank of Canada's 2.8% forecast (TDS: 2.9%)
which will help offset the implicit drag on activity from a stronger
CAD.
Key Quotes
“A portion of this
growth has been borrowed from the future and real GDP is expected to
decelerate over the balance of the quarter and heading into Q2. Exports
have firmed though Q1, helping to substantiate the qualitative aspect of
the recovery narrative.
BoC has intimated a high hurdle to easing.
With a cautious Fed keeping USD under pressure, downside in USDCAD
remains. Data should soften and eventually undermine the CAD but
patience required for a more prominent topside extension which we think
will be capped below 1.30 until Q2 event risks subside. A dip towards
1.19/20 a nontrivial risk in the interim.”
