Multi-month, CAD seems likely to underperform AUD. Near-term however, it is hard to ignore the positive correlation between AUD/CAD and broad swings in equity sentiment, according to Westpac.
Key quotes
“Australia’s coronavirus case trajectory presents the prospect of a quicker revival of domestic services activity than in Canada. This could mean an eventual push to the 0.92-0.93 area.”
“Our base case in Q2 is for USD to find renewed haven demand as brutal data on economic activity and corporate earnings is released around the world. This should undermine equities and could knock AUD/CAD back to around 0.87.”
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