Credit Suisse discusses USD/CAD outlook and likes selling the pair on a rally into 1.28.
"Our stance on CAD has been to look for a retracement in USDCAD above 1.2800, above which we said we would look to go tactically short again, aiming for a 1.2450: we do not see a reason to change approach for now. The view priced into markets that the BoC will taper asset purchases again to C$1bn/week at the 27 Oct decision still seems correct; similarly, while the most recent BoC meeting failed to excite, it also provided no new reasons to second-guess the currently priced-in rates outlook, with lift-off expected to take place in Q3 2022," CS notes.
. The election, while in our view not terribly consequential for the broader CAD outlook, might nevertheless provide a catalyst for the retracement we’ve been looking for, as an example if the NDP were to perform better than expected. We stand ready to sell a spike in USDCAD to 1.2800, with a 1.2450 target and would add a stop loss to the position at 1.2950, just above the mid-Aug highs," CS add.