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The Canadian dollar is on the back foot due to weaker data as well as the strength of the US dollar. What’s next?

Here is their view, courtesy of eFXnews:

Credit Agricole CIB FX Strategy Research argues that  USD/CAD’s corrective rebound could extend to around 1.26 in the short-term, but further gains beyond that are unlikely.  

The focus for CAD traders will be on comments from  BoC Deputy Governor Leduc at 12:30ET.

“The topic of firm creation and productivity may not lend itself to significant comments on monetary policy but given the proximity of the October meeting markets will be looking for any hints on how soon the Governing Council expects to hike.

After the recent BoC comments and softer data the market-implied probability of an October hike has fallen to around 25% from nearly 50% last month….We believe a 25bp increase in the policy rate will be delivered in December along with the Fed hike,” CACIB adds.

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