FXStreet (Delhi) – Research Team at BNP Paribas, notes that the CAD was the strongest G10 currency on Thursday and we see scope for the recovery to persist further.
Key Quotes
“According to our positioning indicator CAD shorts reached fairly extreme levels this week with a score of -40 (on a -50/+50 scale). The combination of BoC inaction, recovery in the WTI crude and a moderate rebound in equities is putting pressure on those shorts.
Technically, the move can extend to 1.4055 but those levels would represent a buying opportunity in our view. We have revised our USDCAD forecast and now expect a cyclical peak of 1.50 in Q3. Friday CPI data should illustrate the BoC’s concern that weakening CAD is boosting inflation and inflation expectations, with CPI and core CPI seen accelerating to 1.7% y/y and 2.1% y/y respectively.”
(Market News Provided by FXstreet)