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4 Feb 2015
USD/CAD set to move towards 1.28 – Rabobank
FXStreet (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank, forecasts USD/CAD to move towards 1.28 levels over the next 3 months, citing CAD’s sensitivity to oil prices.
Key Quotes
“Cheap energy prices are set to be a boon for consumers everywhere but the impact of lost revenue, investment and jobs has starting to mount up in oil producing nations.”
“Towards the end of last year, BoC Governor Poloz suggested that the impact of weaker oil prices was likely to knock 0.3% from Canada’s 2015 GDP growth. Since then oil prices have fallen further suggesting there is increasing risk that the impact could be larger. It is against this backdrop that the BoC announced a surprise rate cut on January 21.”
“In respect of the CAD’s sensitivity to the oil price we see risk of USD/CAD 1.28 on a 3 mth view.”
“On the assumption that oil prices manage a moderate recovery this year we expect USD/CAD to push lower towards 1.25 on a 6 mth view.”
Key Quotes
“Cheap energy prices are set to be a boon for consumers everywhere but the impact of lost revenue, investment and jobs has starting to mount up in oil producing nations.”
“Towards the end of last year, BoC Governor Poloz suggested that the impact of weaker oil prices was likely to knock 0.3% from Canada’s 2015 GDP growth. Since then oil prices have fallen further suggesting there is increasing risk that the impact could be larger. It is against this backdrop that the BoC announced a surprise rate cut on January 21.”
“In respect of the CAD’s sensitivity to the oil price we see risk of USD/CAD 1.28 on a 3 mth view.”
“On the assumption that oil prices manage a moderate recovery this year we expect USD/CAD to push lower towards 1.25 on a 6 mth view.”