USD/CAD a sell into 1.35 - Westpac

Richard Franulovich, Chief Currency Strategist at Westpac, suggests that CAD is proving resilient in the face of new daily lows in oil, the latter more fairly valuing USD/CAD nearer 1.35.

Key Quotes

“But we doubt that the slide in oil will last much longer; certainly the demand side looks OK as China’s Caixin PMI/housing data remain decent.

Locally, the first green shoots of better activity should finally should emerge by autumn, partly a bounceback from the Fort McMurray wildfire disruptions and as Trudeau's fiscal stimulus kicks in, though the latter does not commence until Q4.

USD/CAD a sell into 1.35. US elections the major risk factor: a tight race will see USD/CAD firm given Trump’s anti- NAFTA/immigration stance.”