USD/CAD: Range seen intact above 1.3600 – BBH
Brown Brothers Harriman's (BBH) Elias Haddad notes USD/CAD is directionless around 1.3675 ahead of Canada’s Q4 GDP release, with consensus expecting a modest contraction versus the Bank of Canada’s stall forecast. Haddad argues easing core inflation allows the BOC to keep rates steady, and he expects USD/CAD to hold above 1.3600 near term with resistance at 1.3800.
BOC steady stance underpins range trade
"USD/CAD is directionless around 1.3675."
"The Bank of Canada (BOC) estimates real GDP growth to stall after rising 2.6% SAAR in Q3 because of inventory destocking. Consensus is more downbeat with a -0.2% SAAR decline in Q4 penciled in. "
"The BOC is in good position to keep the policy rate on hold at 2.25% for some time as core inflation pressures have eased and tracking the bank’s projection."
"The swaps curve price-in steady rates over the next twelve months."
"USD/CAD will likely hold above 1.3600 in the near term, with resistance offered at 1.3800 (the 200-day moving average)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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