Bank of America thinks USD / CAD should rise
Bank of America Global Research discusses USD / CAD outlook and Targets the pair at 1.37 in Q3 and 1.40 by year end.
“Since the end of July, the Canadian dollar has continued to appreciate against the US dollar, although it has underperformed many G10 peers, in large part due to a continued strong risk appetite and a dollar much weaker, despite the stability of oil prices, ”notes BofA.
“A situation of historically low oil prices, weak Canadian dollar flows, and low currency risk premium continue to suggest upside USD / CAD risks, potentially mitigated by a reversal of the US growth advantage. in 3Q if the Canadian recovery proves to be more robust than that of the US We continue to monitor global risk assets, which remain a critical influence on the US dollar and the USD / CAD in particular, as well as the shape of the global recovery and oil prices. In the shorter term, we believe the USD / CAD pair may continue to consolidate in the 1.30s lows, but in the medium term we remain lower long», Adds BofA.