Credit Agricole: USD/CAD bulls
Analysts at Credit Agricole expect USD/CAD to move higher in Q3 rising towards 1.11. The specialists justify their forecasts with 3 reasons:
- CAD strengthened in the recent since March as investors were thinking that the Bank of Canada will adopt a more hawkish stance due to the increased inflation. However, the BOC remains dovish and CAD is vulnerable to a reversal which will bring USD/CAD up.
- CAD outperformed because of higher oil prices which made March to June the biggest 3-month advance since September 2013 as conflicts in Iraq increased oil supply concerns. Now oil market fundamentals suggest that oil prices are likely to resume a downtrend, says CA.
- Canada has structural problems, Canadian exports disappoint, while its job growth continues to lag the US.