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Jun 10 - 12:55 PM

CAD: BoC May Deliver A Larger 75bps In July; USD/CAD To Drift Towards 1.20 Through Year-End - Credit Agricole

By eFXdata  —  Jun 10 - 11:45 AM

Credit Agricole CIB Research discusses CAD outlook and maintains a bullish bias through year-end.

"The CAD has been supported by the combination of (1) an extended rally in oil prices, as they were hardly impressed by the OPEC+ promise to ramp up production in the coming months; and (2) a more hawkish BoC in June as it stands ready to act more forcefully after back-to-back 50bp rate hikes. At this stage, the second driver may not offer much more of a boost to the CAD in the near term, unless the BoC is to step up its tightening with the delivery of a larger 75bp rise in July," CACIB notes. 

"Ultimately, prospects of high energy prices for longer could be a more solid backbone for additional CAD gains further down the line, albeit coming more as a slow-burner support than an immediate boost. Our forecasts continue to look for USD/CAD to slowly drift towards 1.20 for the rest of the year, while a light domestic agenda is unlikely to provide any sort of catalyst next week," CACIB adds.

Crédit Agricole Research/Market Commentary


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