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USDCAD: All eyes on BOC governor - TDS

FXStreet (Delhi) – Ned Rumpeltin, European Head of Currency Strategy at TD Securities, suggests that he remains medium term bul when it comes to USDCAD and thinks today’s speech from Governor Poloz will reinforce that thesis as it comes at a critical juncture when the data is just beginning to show a modest turnaround in the economy.

Key Quotes

“Friday’s collapse in oil price proved to be the catalyst that sank USDCAD nearly two big figures lower before finding support around the 1.3020 area and eventually rebounding higher to close above the open. This is constructive for USDCAD in our view and we remain medium-term bulls.”

“Indeed, there is a risk that Q3 GDP will outperform the Bank’s forecast from the July Monetary Policy Report (we are tracking growth around 2.5% compared to the BoC’s 1.5% estimate) but Poloz we think may want to tread carefully.”

“FX sensitive exports have led the turnaround in the trade balance so we do not think that the Governor will want to change his tune from the last communique too much. So, while there is scope for cautious optimism in today’s speech we do not think that the Governor wants to upset the applecart on the very thing that has helped to support the BoC’s wider narrative of a rebound in non-commodity exports.”

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