Back
5 Mar 2014
Flash: USD/CAD 1.11 3 month view - Rabobank
FXStreet (Guatemala) - Jane Foley who is a senior currency strategist at Rabobank reminded us, at the BoC's January policy meeting, the central bank reported that “although the fundamental drivers of growth and future inflation appear to be strengthening, inflation is expected to remain well below target for some time, and therefore the downside risks to inflation have grown in importance.
Key quotes:
“At the same time, risks associated with elevated household imbalances have not materially changed”.
“Weighing these considerations, the Bank judges that the balance of risks remains within the zone articulated in October, and therefore has decided to maintain the target for the overnight rate at 1 per cent”. Although the better tone of GDP and labour data will likely prevent the BoC from turning more dovish today, in essence it seems likely that there will be little fundamental movement from this outlook”.
“We expect USD/CAD to hold close to the 1.11 level on a 1 to 3 mth view”.
“On the assumption that the weak exchange rate, soft monetary policy settings and an increase in export demand from the US pick up later in the year, we are forecasting a modest appreciation in the CAD back towards USD/CAD1.09 on a 12 mth view”.
Key quotes:
“At the same time, risks associated with elevated household imbalances have not materially changed”.
“Weighing these considerations, the Bank judges that the balance of risks remains within the zone articulated in October, and therefore has decided to maintain the target for the overnight rate at 1 per cent”. Although the better tone of GDP and labour data will likely prevent the BoC from turning more dovish today, in essence it seems likely that there will be little fundamental movement from this outlook”.
“We expect USD/CAD to hold close to the 1.11 level on a 1 to 3 mth view”.
“On the assumption that the weak exchange rate, soft monetary policy settings and an increase in export demand from the US pick up later in the year, we are forecasting a modest appreciation in the CAD back towards USD/CAD1.09 on a 12 mth view”.