The George Davis Report: August 2020 Edition
By
George Davis, CMT
Published August 18, 2020
|
5 min watch
A monthly video series on the trajectory of the Canadian dollar
In this edition of the George Davis report, George discusses the drivers of the surprising CAD strength and why we remain cautious in the second half of 2020.
USD/CAD moved to a 5-month low in early August, with the surprising CAD strength driven by the equity market rally, which continues to buoy risk sentiment.
However, we do not believe that the CAD strength is a “made in Canada” story per se.
Rather, corresponding CAD weakness on the crosses suggests that the CAD strength is really the function of broad-based USD weakness.
We continue to remain cautious in the second half of 2020, with a strong “recovery phase” in Q3 followed by an uneven “recuperation phase” thereafter.
This should present the scope for another bout of CAD weakness as government assistance programs wear off.
Hedging Strategies:
USD/CAD
This video is part of our monthly George Davis Report series, with ad hoc reports brought to you as current.
George Davis, CMT
Chief Technical Strategist, Fixed Income, Currencies & Commodities, RBC Capital Markets
With over 30 years of market experience, George Davis is responsible for RBC’s Canadian dollar forecasts as well as intermarket technical analysis research that covers the FX, fixed income and commodity asset classes. Prior to this, he was a Vice President on RBC’s spot Canadian dollar and forward foreign exchange desks in Toronto and a foreign exchange Dealer in Montreal.
His technical research has been recognized via eighteen international awards in the FX, fixed income, commodity and emerging markets asset classes. George was also awarded Technical Analyst of the Year five times (in 2010, 2013, 2017, 2018 and 2019) by the Technical Analyst magazine and in 2016 by the Canadian Society of Technical Analysts, in addition to being inducted into the CSTA Hall of Fame in 2017.
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