NORGES: RATES PROBABLY AT CURRENT LEVEL QUITE SOME TIME

RATES MAY NEED TO BE ON HOLD LONGER THAN ENVISIONED: NORGES

MNI: NORGES BANK LEAVES RATES UNCHANGED AT 4.50%

MNI WATCH: CNB Seen Cutting 50Bps to 5.25%, Signal Slower Pace

MNI China Daily Summary: Tuesday, April 30

MNI BRIEF: China To Keep Tackling Risks In Real Estate, Debts

MNI: BAKER HUGHES US RIG COUNT 605; OIL RIGS 499; GAS RIGS 102

BoE Data Watch

RBA Data Watch

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

BofA Lift USDCAD Forecast Out To End-2025

CANADA
Homepagemarkets-real-timeBulletMarketsForeign Exchange Bullets Bank of Canada Market News
  • BofA have lifted their USDCAD forecasts out to end-2025, with 1.37 for 2Q24 (from 1.34), 1.35 for 4Q24 (1.30), 1.32 for 2Q25 (1.30) and 1.32 for 4Q25 (1.30).
  • “We continue to expect the BoC rate cutting cycle to begin in the summer while our call for the first Fed cut is pushed back to end of the year. Many investors have picked up on this imminent monetary policy divergence, but we believe there is a ceiling to how much USD can rally vs CAD.”
  • “For now, we believe the BoC would likely tolerate some short-term CAD weakness as it looks to embark on the rate cutting cycle” but there would be sensitivity if there is a sharp CAD selloff after the BoC rate cutting cycle starts. “We estimate for every big-figure rise in USD/CAD, it would add +15 bps to CPI.”
  • However, “compared to currencies for major developed countries, the CAD is still in a relatively more favorable position. This makes CAD a less preferred short leg for any bullish USD views.”
169 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • BofA have lifted their USDCAD forecasts out to end-2025, with 1.37 for 2Q24 (from 1.34), 1.35 for 4Q24 (1.30), 1.32 for 2Q25 (1.30) and 1.32 for 4Q25 (1.30).
  • “We continue to expect the BoC rate cutting cycle to begin in the summer while our call for the first Fed cut is pushed back to end of the year. Many investors have picked up on this imminent monetary policy divergence, but we believe there is a ceiling to how much USD can rally vs CAD.”
  • “For now, we believe the BoC would likely tolerate some short-term CAD weakness as it looks to embark on the rate cutting cycle” but there would be sensitivity if there is a sharp CAD selloff after the BoC rate cutting cycle starts. “We estimate for every big-figure rise in USD/CAD, it would add +15 bps to CPI.”
  • However, “compared to currencies for major developed countries, the CAD is still in a relatively more favorable position. This makes CAD a less preferred short leg for any bullish USD views.”