USD/CAD: Uptrend remains intact - Westpac

Richard Franulovich, Research Analyst at Westpac, notes that the USD/CAD’s uptrend remains intact but CAD has been a outperformer against other G10 currencies since Trump’s victory.

Key Quotes

“Positioning may be the key factor with markets already bearish CAD amid the BoC’s mild easing bias. CAD stands to be one of the more obvious beneficiaries from Trump’s pro-growth reflation agenda too. There’s no point calling a top in USD/CAD here – we have tried and failed on several occasions this year.”

“We still believe however that accommodative financial conditions (low interest rates, a weak currency), likely faster US growth next year and Canada’s own fiscal stimulus should secure stronger Canadian growth next year.”

“The complexion to the Canadian data has been improving albeit from a very low base. Altogether 1.33-1.36 range trade seems like the order of the day though CAD should outperform AUD and NZD in 2017 given upside risks to 2017 growth.”