27 Jun 2014
USD/CAD to be most dependent on Fed than BoC - SocGen
FXStreet (Bali) - Sebastien Galy, Senior FX Strategist at Societe Generale, notes that the direction of USD/CAD will depend on the expectation of stronger Fed tightening.
Key Quotes
"We may have to wait until August or the autumn for a more marked slowdown in the Canadian housing market. The BoC will likely continue to deal with the risk of a housing bubble with administrative tools while continuing to focus on the very slow pace of growth of local industries, which are hobbled by a high CAD and low productivity vs the US."
"Ultimately though, the direction of USD/CAD will depend on the expectation of stronger Fed tightening, a process that should happen as autumn nears, driven by a decent labour market and market expectations even more dovish than those of the Fed."
Key Quotes
"We may have to wait until August or the autumn for a more marked slowdown in the Canadian housing market. The BoC will likely continue to deal with the risk of a housing bubble with administrative tools while continuing to focus on the very slow pace of growth of local industries, which are hobbled by a high CAD and low productivity vs the US."
"Ultimately though, the direction of USD/CAD will depend on the expectation of stronger Fed tightening, a process that should happen as autumn nears, driven by a decent labour market and market expectations even more dovish than those of the Fed."