Societe Generale FX Strategy Reserch expect modest CAD upside over the medium-term on the bak of couple of 'major positives'for the Canadian dollar.
First, according to SocGen, is that crude oil prices are expected to rise moderately in the coming months.
"Our oil strategist believes that OPEC is bak in the game of active supply management and that the cuts will work in time. Thus, we are forecasting the price of Brent Crude to average $62.50 per barrel in 4Q17. Given the tight link between the CAD exchange rate and oil prices, such a development would be positive for the currency, " SocGen argues.
Second, according to SocGen, is that the Canadian dollar has cheapened considerably after underperforming since 2012.
"When you add this to our view that the trade-weighted US dollar peaked in 1Q17, it suggests that USD/CAD should decline into year-end," Bank adds.
SocGen expects USD/CAD to drop gradually to 1.30/1.32 by early 2018.
Source of the Graph: Bloomberg Pro Terminal
Senan Fuchedzhiev - Trader
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.