Analysts from TD Securities see the USD/CAD pair moving to the upside plus they have a good idea of shopping for the pair at levels near 1.3300 with a target at 1.3500 and a stop-loss at 1.3180.
Your debt party which has supported the final two major expansions has ended and the CAD should become a relief valve for the macro imbalances which exist in family members sector as rates push higher. We project an archive rise in household debt servicing ratios by year-end. Which should avoid the BOC from maintaining the Fed. Our estimate of the Fed’s terminal rate is well above 4%.
We believe the BOC has neared theirs. We expect Canada’s debt problem and higher rates to start a data domino into Q4. You’ll find nothing to like concerning the CAD at the moment; it’s the worst-ranked currency on our scorecard with virtually all macro drivers leaning in the negative.
With global PMIs weakening, it’ll be problematic for the CAD to rally. We have been also wary a ‘Volcker’ sort of messaging emerges at the Fed, hampering the CAD. Key USDCAD support in 1.3200/1.3230 since it marks a rest of triple top.
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