Via ANZ on the Canadian dollar:
- If CPI continues to slip towards the BoC’s expectations of 2.6% YoY by year-end, the pause in the current monetary policy tightening cycle may bring about a rebound in broader economic data later in the year, leading to tailwinds for the CAD as the DXY declines and Oil prices rise as per our forecasts.
- In the near term, CAD underperformance will continue, but we believe that USD/CAD will gradually fall to 1.29 by December this year.
Weekly USD/CAD:
