The George Davis Report: February 2023 Edition
By
George Davis, CMT
Published February 17, 2023
|
9 min watch
A monthly video series on the trajectory of the Canadian dollar
Don’t miss this month’s edition of the George Davis Report, where George discusses FX market overshoots, the Bank of Canada policy stance and our revised forecast profile for USD/CAD.
Our research shows that some currencies have a tendency to overshoot in January as consensus trades for the year ahead are put on.
With USD/CAD registering a net decline in January 2023, it presents the scope for a corrective rally in February/March as the overshoot is corrected.
The Bank of Canada has shifted to a neutral policy stance after taking the overnight rate to 4.50% in January.
The hurdle for additional rate hikes is higher now, with an “accumulation of evidence” of stronger than forecast data required to nudge the BoC off of the sidelines.
We have revised our 2023 forecast profile for USD/CAD to include a lower peak that is dispersed out over a longer time horizon.
For the trading range:
USD/CAD
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 twenty-two international awards in the FX, fixed income, commodity and emerging markets asset classes. George was also awarded Technical Analyst of the Year six times by the Technical Analyst magazine and once by the Canadian Society of Technical Analysts, in addition to being inducted into the CSTA Hall of Fame in 2017. George has a Bachelor of Commerce (Honours) from Concordia University, holds the Chartered Market Technician (CMT) designation and is a Managing Director of RBC Capital Markets.
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