Forex Flash: Fed action key to CAD 2013 direction – Goldman Sachs
FXstreet.com (Barcelona) - Goldman Sachs FX Strategists are expecting USDCAD to decline to 0.99, 0.97 and 0.97 on a 3, 6 and 12 month basis with EURCAD expected to climb to 1.24, 1.29 and 1.35 over the same period.
Over 2013, the team expect Canada to broadly match the US in relative growth terms, which would generally be neutral for the CAD. They also continue to expect broad USD weakness largely resulting from persistently wide twin deficits. In contrast, Canada has a small positive BBoP position despite a negative current account. They feel that the dollar will also likely continue to be weighed on by the Fed's monetary stance relative to elsewhere. In the near term. The continued cyclical weakness in the global economy and uncertainty surrounding the fiscal cliff pose downside risk to the CAD.
Over 2013, the team expect Canada to broadly match the US in relative growth terms, which would generally be neutral for the CAD. They also continue to expect broad USD weakness largely resulting from persistently wide twin deficits. In contrast, Canada has a small positive BBoP position despite a negative current account. They feel that the dollar will also likely continue to be weighed on by the Fed's monetary stance relative to elsewhere. In the near term. The continued cyclical weakness in the global economy and uncertainty surrounding the fiscal cliff pose downside risk to the CAD.
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