USDCAD: Still seen moving higher, but upward slowing – Danske Bank
|The USDCAD is seen moving to the upside over the next quarters, although at a slower pace after the recent decline of the US Dollar, according to analysts from Danske Bank. They forecast USDCAD at 1.36 in a month, and at 1.39 in a six-month horizon.
Key Quotes:
“Similar to other central banks that have lead the global tightening cycle Bank of Canada has also slowed down its hiking pace amid weaker growth prospects. With BoC having hiked policy rates to 3.75% and with signs of slowing growth and not least housing market we maintain a final 50bp hike for the December meeting which we expect will mark the final hike of this cycle.”
“In terms of spot we regard relative rates and the global environment as supportive of USD/CAD. The cross will remain highly sensitive to markets pricing Fed pivot and China optimism – in either direction – leaving the potential of big spot moves in the months ahead.”
“In light of the recent drop in the broad USD, we lower our USD/CAD profile but maintain an upward slowing trajectory.”
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