- Analytics
- News and Tools
- Market News
- USD/CAD to reach the 1.40 handle before year-end – Rabobank
USD/CAD to reach the 1.40 handle before year-end – Rabobank
The Bank of Canada (BoC) announced a 50 bps increase in the policy rate to 3.75%. USD/CAD dropped back below 1.36 after a spike to 1.3650. Nonetheless, economists at Rabobank expect the pair to grind higher towards 1.40.
USD strength to re-emerge in the coming weeks
“The BoC surprised the market with a 50 bps hike to 3.75%, in contrast to market-implied pricing, which pointed to a 75 bps increase.”
“Growth forecasts were revised down by 1ppt to 1.0% in 2023, and -0.5ppt to 2% in 2024. Inflation forecasts were slightly lower, down -0.5ppt to 4% in 2023 and -0.1ppt to 2.2%.”
“While we have reduced our terminal rate forecast by 25 bps in light of today’s smaller than expected 50 bps hike, we still expect another 50 bps hike in December, 25 bps in January, and a holding pattern after that into 2024.”
“In terms of USD/CAD, the unwind of the initial spike higher to 1.3650 was somewhat surprising, but the recent decline in the pair is a product of a USD positioning clearout rather than a change in trend, and we still see the pair touching the 1.40 handle before year-end as USD strength re-emerges in the coming weeks.”
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
