Forex Flash: USD/CAD would target 0.96 in Q4 2013 – Scotiabank

FXstreet.com (Barcelona) - After bouncing off today's lows in the vicinity of 0.9845, the cross has managed to pick up pace and recover the ground lost, trading back to the 0.9860 region ahead of the NA open.

Camilla Sutton, Chief Currency Strategist at Scotiabank, comments, "USDCAD is trading just below the 2012 average level of 0.9996 and has slipped below the 50, 100 and 200-day moving averages. In our view, most drivers of CAD should be supporting the currency. Oil prices are higher and the Brent-WTI spread is narrowing, the two-year US-CN spread is falling and equities are flirting with new highs as the risk environment is supportive. In addition, recent domestic data& suggest that the economic backdrop is not deteriorating; while the economic outlook for both the US and China has stabilized. In this environment CAD should be strengthening& We expect CAD to strengthen in 2012 holding a Q413 target of 1.04 (in USDCAD terms 0.96)".