Buy the Canadian Dollar says Goldman Sachs

The Canadian Dollar is likely to rise steadily against its U.S. rival over the coming quarters, according to analysts at Goldman Sachs, who say buying the Loonie is one of their best investment ideas.  

Sterling starts the new week on a firmer footing against the Canadian Dollar at the start of the new week with 1 GBP buying 1.6933 CAD amidst a broader pickup in Sterling exchange rates. Our technical studies do however suggest further losses are likely.

The Canadian Dollar outlook clouded again over this week after an influential U.S. lawmaker said changes must be made to the new U.S.-Mexico-Canada Agreement before it will pass through the House of Representatives.

The GBP/CAD pair has just reached the upper boundary of that range and it will either breakout higher or fall back down within the range, we think it is more likely that it will fall back down.

The Canadian Dollar is lacking a clear narrative to drive it in one direction or the other at present, according to strategists at Toronto-headquartered BMO Capital Markets, who say the Loonie could remain in a "flat range" until the U.S. Dollar index tops out and goes into reverse. 

The Pound-to-Canadian Dollar exchange rate has risen to the top of its range at 1.7200 suggesting there is now an increasing chance the pair could hit a 'glass ceiling' and see further gains capped.

Technical studies signal a good possibility this young rally could extend given the exchange rate has now successfully broken back above the 50-day MA at 1.6950, an event seen as a key 'right of passage' hurdle cleared for a young bullish trend in its life-cycle to maturity.

The Canadian Dollar handed back earlier gains and slipped lower midway through the final session of the week after the latest official data showed the labour market cooling its heels in October, which will do little to encourage markets to become more confident in pricing future interest rate rises from the Bank of Canada (BoC).