Recent upward grind in USD/CAD likely peters out into 1.31/1.32 though much depends on fluid NAFTA break up risk, according to Richard Franulovich, Research Analyst at Westpac.
Key Quotes
“If anything the latest signals out of the acrimonious G7 meeting hardly inspire confidence.”
“Against that, the BoC looks poised to hike rates when they next meet, July 13. In their last statement the Bank shed their customary “caution” regarding future policy adjustments and replaced it with a promise to take “gradual approach”.”
“Backing that newfound confidence, the latest employment report shows wages growth accelerated to its fastest pace since the financial crisis, hitting 3.9% in May from 3.3% in April.”
“The caveat is that much of the boost owes to minimum wage hikes rather than a genuine underlying uplift in compensation due to declining labour market slack.”
“USD/CAD likely to hold to a 1.27 to 1.31 range near term.”
Share
