Synopsis:
Credit Agricole anticipates USD/CAD will struggle to maintain its recent momentum after hitting seven-month lows around 1.3420, with the Canadian dollar showing resilience amid external pressures and upcoming economic data.
Key Points:
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Recent Performance:
USD/CAD has fallen, influenced by the Canadian dollar's strength due to Chinese stimulus measures bolstering the RMB. -
Impact of Oil Prices:
The CAD has largely ignored declines in oil prices following Saudi Arabia's plans to increase production, shifting focus to market share. -
Economic Context:
The Canadian economic landscape remains quiet, with limited data releases until October 11, leaving traders cautious about GDP growth. -
Monetary Policy Expectations:
Struggles in Canadian money markets could heighten expectations for more decisive actions from the Bank of Canada (BoC), potentially impacting USD/CAD.
Conclusion:
Credit Agricole's outlook indicates that while USD/CAD has reached significant lows, future movements will depend on domestic economic indicators, external influences, and monetary policy expectations. Traders should remain attentive to evolving conditions that could prompt rapid changes in the exchange rate.