Back
31 Mar 2015
USD/CAD might move towards 1.30 by year-end - Rabobank
FXStreet (Barcelona) - Falling oil prices and the recent economic data out of Canada indicates towards a high probability of a rate cut by the BoC, explains Jane Foley, Senior Currency Strategist at Rabobank, and forecasts USD/CAD to end the year at 1.30 levels.
Key Quotes
“How well oil prices fare will be key for the outlook for Canadian, exports, employment, incomes and growth. At present the BoC has made clear that the January rate cut was intended at an insurance measure. However, with core CPI inflation expected to trend significantly lower this year, the market is likely to hold onto speculation that a further interest rate cut could be in the pipeline dependent on economic data.”
“On the assumption that this speculation persists and given our view that the USD can continue to strengthen this year, we have revised up our USD/CAD forecasts and see potential for a move towards 1.30 by year end.”
Key Quotes
“How well oil prices fare will be key for the outlook for Canadian, exports, employment, incomes and growth. At present the BoC has made clear that the January rate cut was intended at an insurance measure. However, with core CPI inflation expected to trend significantly lower this year, the market is likely to hold onto speculation that a further interest rate cut could be in the pipeline dependent on economic data.”
“On the assumption that this speculation persists and given our view that the USD can continue to strengthen this year, we have revised up our USD/CAD forecasts and see potential for a move towards 1.30 by year end.”