USD/CAD stays positive near-term – Scotiabank

Eric Theroret, FX Strategist at Scotiabank sees the pair’s outlook on the constructive side in the near-term.

Key Quotes

“The outlook for relative central bank policy is dominant, weighing on CAD as we note the steady deterioration in expectations for the Bank of Canada. OIS have been pricing a roughly 30% chance of a 25bpt rate cut since last week’s CPI/retail sales disappointment”.

“Any weakness in oil would likely compound the CAD headwinds presented by relative policy and the broader tone”.

“USDCAD has respected support at the 50 day MA (1.3056) with a bounce through the 21 day MA (1.3092) and the 9 day MA (1.3146) and appears set to fully retrace Wednesday’s decline from the 1.3196 open. We look to gains through 1.32 and 1.3250, toward Tuesday’s high around 1.3280 and our long-called target range of 1.33 to 1.35. Near-term support is expected at 1.31”.