AUD/CAD could probe a little higher to around 1.03near term - Westpac

AUD/CAD could probe a little higher near term, possibly to around 1.03, but over the next few weeks Westpac sees it falling back below 1.00, towards the 0.99 area, suggests Martina Song, Research Analyst at Westpac.

Key Quotes

“Both the RBA and Bank of Canada are on hold for now, but commentary from the BoC has been relatively more upbeat.”

“Short term, AUD should remain firm as the Q1 GDP release negates the recent bad news and overly gloomy view on Australia. Australia now holds the record for the longest period without recession. We will however need better data soon for the RBA’s 3+% growth forecasts to be met.”

“The Bank of Canada meanwhile has finally started sounding more positive. Their upbeat tone on recent data should offset continuing uncertainties around trade agreement renegotiations with the US and any further weakness in oil.”

“Neither AUD nor CAD are receiving much support from commodities at the moment. Iron ore prices have been sliding since the February peak, dragging our estimate of AUD fair value lower. Crude meanwhile has been unable to hold on to gains despite the OPEC/nonOPEC agreement to extend production cuts.”