USD/CAD forecast to mover lower over next months – CitiBank

Analysts at Citibank forecast the USD/CAD pair at 1.31 over 0-3 months, at 1.28 in 6-12M and at 1.22 in the long term. 

Key Quotes:

“Although the October Bank of Canada (BoC) was more dovish than expected with the Bank’s 2020/21 GDP forecasts lowered and an emphasis placed on the downside risks of trade wars, the domestic Canadian economy remains resilient and the BoC on hold which support CAD.”

“Global downside still the main risk which may lead BoC cut rate.”

“Governor Poloz’s denial of insurance easing implies cuts will only come with a material worsening of the external outlook. CAD supportive given Canadian rates currently price an almost 100% probability of a 25bp cut in 6 months time.”

“USDCAD has broken good resistance around 1.3275. Good resistance in the 1.3348-1.3383 range looks likely to be tested. Next pivotal support at 1.3016.”