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The Canadian dollar rocked and rolled on the OPEC meeting and awaits the GDP report. What’s next?

Here is their view, courtesy of eFXnews:

Societe Generale FX  Strategy Research expect modest CAD upside over the medium-term on the back are a  couple of major positives for the Canadian dollar.

The first, according to SocGen, is that crude oil prices are expected to rise moderately in the coming months.

“Our oil strategist believes that OPEC is back in the game of active supply management and that the cuts will work in time. Thus, we are forecasting the price of  Brent crude to average $62.50/bbl in 4Q17.  Given the tight link between the CAD exchange rate and oil prices, such a development would be positive for the currency,” SocGen argues.

The second, according to SocGen,  the Canadian dollar has cheapened considerably after underperforming since 2012.

“When you add this to our view that the trade-weighted US dollar peaked in 1Q17, it suggests that USD/CAD should decline into year-end,” SocGen adds.

SocGen  expects USD/CAD to drop gradually to 1.30/1.32 by early 2018.

USD/CAD is trading circa 1.3490 as of writing.

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