USD/CAD a sell on rallies targeting 1.22 - BofA
USD/CAD up 13 pips to 1.2463 today
Bank of America Global Research discusses this week's BoC meeting and likes selling USD/CAD rallies targeting a move back towards 1.22.
"We expect the BoC to keep the policy rate unchanged but to reduce bond purchases to at least C$2bn per week on 14 July," BofA notes.
"USDCAD has risen to our 1.25 forecast for 3Q. At these levels, however, we see risk premium as elevated. Our tactical view is to sell rallies. We expect the pair to ease back to 1.22, our end-year forecast and the level we estimate as being consistent with medium-term fundamentals, including relative US-CA cyclical position and terms of trade (inclusive of commodity prices),"BofA adds.For bank trades, check out eFX Plus.