Widening policy divergence between BoC and Fed lifting USD/CAD – BTMU

FXStreet (Mumbai) - The global markets research team at BTMU believes the diverging monetary policy expectations from the Fed and the Bank of Canada is lifting the USD/CAD pair and believes the Canadian dollar is likely to remain under downward pressure in the near-term.

Key Quotes

“The outlook for the Canadian dollar has deteriorated driven by renewed weakness in the price of crude oil and widening expectations for policy divergence between the BoC and the Fed which remains on course to begin raising rates this year.

“In contrast, the BoC may still ease policy further if growth continues to disappoints, and appears unlikely to consider tightening monetary policy until at least the second half of next year at the earliest.”