This in brief from Citi on the CAD.

The bank forecasts USD/CAD to circa 1.33 in the 3 month horizon

  • And to 1.3100 in 6 to 12 month horizons

Citing:

Bank of Canada Governor Poloz heavily emphasizes downside risks from trade while remaining quite upbeat on the economy, saying

  1. the slowdown is likely to prove temporary;
  2. the future outlook remains positive;
  3. rates till more likely to go up than down if forecasts are right.

While now not the base case, we may not rule out the potential for future rate hikes.

More specifically on the currency/techs:

  • USDCAD has broken through the 1.3270/90-1.3400/20 range to the topside.
  • But with Canadian short rates pricing in rate cuts from the BoC that is highly unlikely, CAD should start to find better support at the current levels.