1. Hello Guest Do you know binary.com offers exclusive $20 No Deposit Bonus for FX Binary Point visitors? Click here to sign up

How low can CAD go? - Nomura

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 24, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Joined:
    Oct 7, 2015
    Messages:
    27,524
    Likes Received:
    0
    FXStreet (Delhi) – Charles St-Arnaud, Research Analyst at Nomura, suggests that with USD/CAD slightly overvalued, further increase seems limited in the pair.

    Key Quotes

    “The Canadian dollar has depreciated significantly in recent weeks. Most of the depreciation can be linked to the further decline in oil prices and, to a lesser extent, to an increased probability of a rate cut by the BoC. Using our valuation model for USD/CAD, we estimate that USD/CAD should be closer to 1.35, given current commodity prices and rates differential.”

    “We also find that commodity prices would need to decline by another 20% for USD/CAD fair value to increase above 1.40. This suggests that, unless commodities prices continue to decline, further increases in USD/CAD are likely to be limited at this point, unless the Canadian economy falters.”
    For more information, read our latest forex news.
     

Share This Page