Fundamental Forecast for CAD: Bearish
- Canada’s Dollar Strengthen on Crude Oil’s Turnaround of 20%+ in 1-week, which shows few fundamental factors sustaining the rally.
- Canadian Dollar Likely to Gain further versus US Dollar per the Speculative Sentiment Index
- Canadian Dollar Strength Best Plaid through Bearish EUR/CAD As Markets Digest Draghi’s Comments & Crude’s Bounce
Steven Poloz’s refrain of a Bank of Canada rate cut that had become the preferred bet as the Loonie dropped brought a magnificent reversal for the CAD. However, toward the end of the week, the CAD rally stalled and CAD-crosses looked to oil for direction. For a majority of the week, a ‘Dash for Trash’ in Oil assets seemed sustainable as news of a coordinated global oil production cut appeared in the making. However, on Thursday, the news became obvious that such a plan was unlikely to develop, and the elusiveness of such a plan made Oil and, therefore, CAD unable to hold gains. One oil trader, Gerrit Zambo of BayernLB stated, “Don’t think there are many experienced people that really think Russia or Saudi Arabia would considerably cut production as long as they have the possibility to sell into the market,”