Don’t miss this month’s edition of the George Davis Report, where George discusses the implications of various interest rate scenarios on USD/CAD and whether or not we can reach the psychological 1.4000 threshold.
What you need to know:
The market has continued to reprice Fed policy expectations in response to the stronger than expected US growth and inflation data this year.
This repricing has caused many to now expect the BoC and other central banks to cut before the Fed, cutting more than the Fed this year in the process.
The resulting strength in the USD has many asking if USD/CAD can extend gains to the psychological 1.4000 threshold in the weeks and months ahead.
We update our work on CAD’s sensitivity to US-CA interest rate spreads in order to address this issue.
Technically, last year’s high at 1.3899 and the 2022 high at 1.3977 serve as key barriers/hurdles to a test of 1.4000.
For the trading range:
USD/CAD
Buyers
1.3400/1.3500
Sellers
1.3800/1.3900
