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
“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.”