The Canadian dollar is enjoying some backwind from oil prices. WTI is above $44 and USD/CAD slips under 1.32. What’s next?
Here is their view, courtesy of eFXnews:
Barclays Capital FX Strategy Research notes that after the recent BoC hawkish shift, markets will focus on remarks from the central banks officials to tease out the timing of any possible BoC action.
“We believe expectations of impending tightening are premature and would fade CAD strength. We recommend short CADINR spot and short CADNZD through call spreads,” Barclays recommends.
In terms of this week’s data, Barclays notes that the main data release is the monthly GDP (Friday) in which Barclays forecasts this to have increased 0.25% in April (3.4% y/y), slowing its pace from last month (0.5% m/m).
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