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BoC neutral, USD/CAD seen higher – Danske Bank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Edinburgh) - Morten Helt, Senior Analyst at Danske Bank, has assessed yesterday’s BoC meeting and prospects for the pair.

    Key Quotes

    “The Bank of Canada kept rates unchanged yesterday (as we indeed called for; analysts and market split) and policy statement was rather neutral: this notes the drop in oil and financial vulnerabilities of course and downgrades GDP outlook but stresses that the positive impact of fiscal measures are not incl. in this forecast”.

    “All in all, the BoC is likely to be on hold for the foreseeable future, and we believe that it will take a further drop in oil or a significant change in Fed stance to being more dovish to make the BoC cut”.

    “While fair to see USD/CAD drop here, we still expect an uptick in the cross ahead as the Fed is now priced very soft and this should help Canadian rebalancing to a world of lower oil for longer”.
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