Credit Agricole likes buying CAD on dips over the coming weeks.
"While we expect risk sentiment to continue proving the currency’s predominant driver, this week’s focus may also turn back to data, with September inflation scheduled to be released. When considering that muted price growth remains a key argument to the BoC for showing low sensitivity to rebounding growth momentum, then one should expect markets to pay more attention. However, even if price growth were to surprise positively, one month of data is unlikely to have meaningful impact on rate expectations," CACIB notes.
"Stable rate outlook coupled with broadly balanced speculative positioning and more unstable global risk sentiment could well keep the CAD on the back-foot this week. While we stick to a positive big picture view, we believe better levels will be reached for considering new longs," CACIB adds.