The observed volatility of the USD/CAD has been significantly reduced, since the Loonie seems to be negotiating again as an extension of the feeling of US growth – and therefore is more correlated with the USD, FX analysts of ING Francesco Pesole and Chris Turner point out.
The case for a return above 1.40 is now quite convincing
“May has begun with a soft tone for the CAD, since the first trip of Prime Minister Mark Carney to meet with Trump did not suggest that the tensions between the US and Canada will be reduced soon. The renegotiations of the USMCA will not be as fast as the transcontinental trade agreements, or for the US or for Canada.”
“The short -term risks are moderately upwards for the USD/CAD, since the right value in the short term of the torque is still about 1.42. It should remain some risk premium over the USD, but the case for a return above 1.40 is now quite convincing, also because the deterioration of internal data could take the Canada Bank to cut rates again in June.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
