What is the outlook for USD/CAD in Q3 and at year-end?
Here is their view, courtesy of eFXdata:
Bank of America Global Research discusses USD/CAD outlook and targets the pair at 1.37 in Q3 and 1.40 by year-end.
“Since late July, the Canadian dollar has continued to appreciate against the US dollar, though has underperformed many G10 peers, largely on the back of persistently buoyant risk appetite and a broadly weaker USD, despite stable oil prices,” BofA notes.
“A situation of historically low oil prices, unsupportive CAD flows and low FX risk premium continues to suggest upside USD/CAD risks, potentially mitigated somewhat by reversal in the US growth advantage in 3Q if the Canadian recovery proves more robust than that of the US. We continue to monitor global risk assets, which remain a critical influence on the US dollar and USD/CAD specifically, as well as the shape of the global recovery and oil prices. Over the shorter term, we think USD/CAD may continue to consolidate in the low 1.30s, but medium-term we remain buyers on dips,” BofA adds.
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