USD/CAD will resume growth after correction
Analysts at the Bank of Montreal think that USD/CAD has risen too far to the highest level since July 2009 at 1.1467 and too fast and is now overbought. In their view, the pair will now settle between 1.12 and 1.13.
After that US dollar will resume its advance to 1.15 by the end of the year as Bank of Canada continues monetary stimulus, while the Federal Reserve moves to normalize policy.
BMO expects the first Fed rate increase to occur in the second quarter of 2015, while the Bank of Canada stands pat until 2016. On Nov. 3 the BOC Governor Poloz said the nation’s economy still requires monetary stimulus to drive the recovery in the face of “headwinds” of a weak global economy.
Another bearish factor for CAD is falling prices for crude oil that touched the lowest level of $75.84 since October 2011 on Nov. 4.