The Canadian dollar has outperformed in 1H 2021. But economists at OCBC Bank expect the USD/CAD to be contained within a broad 1.20-1.25 in the coming months.
Difficult to see a break below 1.20
“It is difficult to see the BoC turning materially more hawkish for now, and existing expectations are already well-priced into the CAD. Coupled with the Fed also in the hawkish camp, further downside for the USD/CAD beyond 1.2000, while not explicitly ruled out, will be a tough ask.”
“Bias is for the USD/CAD pair to be contained within a broad 1.2000 to 1.2500 range.”
“The CAD strength is probably better expressed through the crosses.”
