Keep Chasing USD/CAD Higher: CIBC Forecast
- Written by: Gary Howes
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The US dollar continues to surge higher against the Canadian dollar and trades at 1.3117. Concerning the outlook, Jeremy Stretch at CIBC writes:
We have continued to see USD CAD moving higher as oil prices soften and rate spreads move further in favour of the US over Canada, risking further investor catch-up.
Expect evidence of further US/ CAD Q2 macro-economic divergence as today is set to see another disappointing domestic data release.
Our colleagues in CIBC Capital Markets Economics expect wholesale trade to decline by 0.7% in March, compared to a median expectation of a 0.5% fall.
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Moreover, with retail sales tomorrow also likely to materially undershoot expectations, underlining a weak retail handover into Q2, expect USD CAD topside to remain in play, this comes as the break of 1.3015 opens the way for 1.3130 and above there 1.3170 and 1.32.
Only a close back below 1.3015 would risk compromising maintaining topside targets into the mass of data ahead of the long holiday weekend.
We have continued to see USD CAD moving higher as oil prices soften and rate spreads move further in favour of the US over Canada, risking further investor catch-up.
Expect evidence of further US/ CAD Q2 macro-economic divergence as today is set to see another disappointing domestic data release. Our colleagues in CIBC Capital Markets Economics expect wholesale trade to decline by 0.7% in March, compared to a median expectation of a 0.5% fall.
Moreover, with retail sales tomorrow also likely to materially undershoot expectations, underlining a weak retail handover into Q2, expect USD CAD topside to remain in play, this comes as the break of 1.3015 opens the way for 1.3130 and above there 1.3170 and 1.32.
Only a close back below 1.3015 would risk compromising maintaining topside targets into the mass of data ahead of the long holiday weekend.