The Canadian dollar has stabilized lately, after sustaining sharp losses in March. What is the outlook for USD/CAD?
Here is their view, courtesy of eFXdata:
Credit Agricole Research discusses CAD outlook and adopts a cautious bias around current levels.
“The CAD has regained some composure of late on the back of cautious consolidation of global oil prices and after the BoC cut rate by 50bp and launched QE earlier last week…In addition, in the wake of the BoC’s easing measures, the rates markets seem to assume that the MPC has hit its effective lower bound in rates. In turn, we think that at least some of the cyclical headwinds for the CAD could start abating from here,” CACIB notes.
“Looking ahead, key for the CAD this week will be the outlook for oil as well as Canadian labour market. We believe that it would take further tangible evidence that the oil price outlook is stabilising to see the CAD extend its recent recovery. Moreover, the upcoming releases could highlight the grave impact of the oil price slump and Covid-19 on the Canadian economy and mute any CAD gains for the time being,” CACIB adds.
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