The George Davis Report: June 2019 Edition

By George Davis
Published June 17, 2019 | 3 min watch

A monthly video series on the trajectory of the Canadian dollar

In this edition of the George Davis report, George discusses how a shift in interest rate expectations has caused a narrowing in US/Canada interest rate differentials and the impact on the Canadian dollar.

 

What you need to know

1

There has been an important shift in interest rate expectations since our last video update.

2

In particular, the market has priced in more aggressive rate cut expectations in the US relative to Canada.

3

The net result has been a narrowing in US-Canada interest rate differentials.

4

USD/CAD has responded by breaking a key long-term support trendline near 1.3350.

5

This should present more attractive levels for buyers of USD/CAD to cover some of their exposure.

Hedging Strategies

USD/CAD

Buyers

1.3000 – 1.3100

Sellers

1.3400 – 1.3500

This video is part of our monthly George Davis Report series, with ad hoc reports brought to you as current.

© RBC Capital Markets, LLC, RBC Dominion Securities Inc., RBC Europe Limited 2018


George Davis
Chief Technical Strategist, FX Trading, Strategy & Sales, RBC Capital Markets


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