USD/CAD Door Still Open for a Test of 1.33 – Scotiabank
FX Strategist at Scotiabank Eric Theoret remains bullish on the pair in the near term and believes it could test 1.33.
Key Quotes
“USDCAD has yet to break from recent congestion around its 9 day MA (1.3069) and continues to consolidate around the mid-point of its two week range roughly bound between 1.29 and 1.32. We maintain a bias to gains and look to 1.33 and 1.35”.
“Poloz’ Saturday lecture topic has been released — “Monetary/ Fiscal Policy Mix and Financial Stability: The Medium Term Is Still the Message”. We maintain expectations for a forceful reaffirmation of the BoC’s neutral policy bias and look to CAD weakness on the basis of relative central bank policy in light of Fed normalization. In terms of sentiment, we note the gradual turn in risk reversals and the slight rise in the relative cost of protection against CAD weakness”.
