USD/CAD: Oil still holding back CAD gains – CIBC

Analysts at CIBC see the USD/CAD pair to still be hovering around 1.41 by the end of next year, held back by Canada’s trade imbalance. Key Quotes: “Oi  |  22/05/2020 19:46

Analysts at CIBC see the USD/CAD pair to still be hovering around 1.41 by the end of next year, held back by Canada’s trade imbalance.

Key Quotes: 

“Oil’s modest recovery over the past couple of weeks has seen the loonie pick up some strength relative to the weakness we saw back in mid-March, when the pandemic first ensued. But oil prices are still sitting at low levels, and the trend back to risk assets looks vulnerable, so we don’t expect the C$ to hold onto that strength in the nearterm.”

“Markets could be pricing in slightly too much optimism as of right now. As the reality of depressed equity earnings, and the limitations on the recovery by the potential for a second wave set in, that would see a stall in oil’s rebound, allowing USD/CAD to reach 1.41 by June and ending Q3 at 1.43.”

“Looking ahead to the first half of 2021, we expect the C$ to strengthen alongside a more pronounced economic recovery, whose timing is likely dependent on the evolution of the virus and progress towards a vaccine. Even so, Canada’s weak trade record in the last cycle points to the need for a more competitive exchange rate in the longer-term, as the economy weans itself off of debtfinanced consumption and housing as sources of growth.”

Share

Popular News

Show More Popular News

Market Insight's Views

Market Insight analyses will provide both fundamental and technical comprehensions on FX
and other asset classes for Market Insight viewers

RISK WARNING

The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you then this should be solely at your discretion and GKFX will not be held accountable in any way.

  • ForexF
  • IndicesI
  • CommoditiesC
        Back

        Login to Market Insight Account

        Your Market Insight account gives you access to the tools that we offer our customers including our
        Technical Studies & Sentiment for your accounts.

        Forgot Password?

        Don't you have a Market Insight account? With a few easy steps you can easily register to Market Insight

        Create a Market Insight's Account

        Your Market Insight account gives you access to the tools that we offer our customers including our Technical Studies & Sentiment for your accounts.

        register_ty

        Thank you!

        Welcome to Market Insight family!

        You have succesfully completed the registration.
        We will send you an e-mail to give you some
        instructions and our Terms and Conditions!
        Our account representatives will be contacting you as
        soon as possible. If you have any further questions
        please do not hesitate to mail us via info@marketinsight.com