CAD: Growth steady but USD remains key driver – ING

Canadian growth figures are expected to show a 0.7% year-on-year increase, but this is viewed as a backward-looking indicator. The Bank of Canada is likely to maintain its neutral stance, with potential rate adjustments leaning towards a decrease. The USD's performance will continue to significantly influence the CAD, notes ING FX Strategist Francesco Pesole.

Canadian growth and USD correlation

"We see no real changes in the neutral stance, but the options remain open, and if we were to see any rate adjustment in the coming months, we think it’s more likely to be down than up."

"If this USD recovery has legs, USD/CAD should at least head back to 1.36-1.37."

"Our view for USD/CAD is bullish in the short-term anyway, not only as we continue to favour the chances of further USD gains from here."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)