USD/CAD: Targeting 1.35 in Next Few Months - Scotiabank
Analysts at Scotiabank noted that Yesterday’s weak Canadian trade report
provided the exclamation point to our assertion on Tuesday that the
good Canadian news was largely priced in to the CAD around the 1.25
area.
Key Quotes:
"Weak trade perhaps
reflects sluggish growth in the US in Q1. But regardless of the reason,
headwinds for the external sector will dampen the recent rise in
Canadian interest rates and help widen out US-Canada rate differentials
back in the USD’s favour."
"Firmer crude oil prices may not help
the CAD too much while WTI remains within recent ranges. We think the
USD is staging a significant trend reversal and favour looking to buy
modest USD dips now."
"A high close for USD/CAD on the week will bolster recovery potential towards the 1.33/1.35 range in the next few months."
