Dollar/CAD fell on Mnuchin’s endorsement of a weaker US dollar. But are the falls limited due to NAFTA? Here are two opinions:
Here is their view, courtesy of eFXnews:
USD/CAD: Some Cracks Starting To Show In CAD Performance; Where To Target? – CIBC
CIBC Research discusses USD/CAD outlook, and notes that “some cracks are starting to appear in the CAD’s performance.”
“While the currency is up year-to-date against the greenback, it is down more than 1% against a basket of other currencies.
And added to that, it’s underperformance comes in stark contrast to the G10 leading performance of another oil-driven currency, the NOK.
As the BoC takes a prolonged pause in rate hikes following this week’s move, expect to see C$ weakness beginning to materialize in USDCAD as well,” CIBC argues.
CIBC Research targets USD/CAD at 1.28 in Q1, and at 1.33 in Q2.
USD/CAD: Remain N-Term Buyers Of Dips Near The Lows Around 1.2360 – TD
TD Research discusses USD/CAD outlook and notes that besides NAFTA, the focus for CAD this week sits on the data calendar.
“CAD comes into the heavy data calendar trading rich to our HFFV estimates, leaning long on a few positioning indicators and lacking a sufficient risk premium in the case of a trigger of Article 2205.
The other concern this week is the heavy data calendar with CPI and retail sales later in the week,” TD adds.
“We remain, nearterm buyers of dips in USDCAD near the lows around 1.2360,” TD advises.
