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The Canadian dollar has been in retreat mode since it the post-hike peak when USD/CAD reached the 1.20 handle. What’s next for the BOC? Here is the view from TD:

Here is their view, courtesy of eFXnews:

TD Research has pushed back its call for a BoC hike from Oct to Dec this year, and shifted its call for BoC fourth hike next year from Jan to Mar.

Against this backdrop, TD has upgraded its USD/CAD view and forecast on the ground that the diminished scope of a more front-loaded tightening cycle favors a bit less downside in USD/CAD.

“At the same time, the short-term setup probably supports a stronger bias in USDCAD, although  we would look to sell into rallies.

Ultimately,  we suspect that we are now sitting in a 1.20 to 1.25 range and would look to fade each of those extremes into year-end,” TD advises.

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