CAD outlook remains negative – Nomura

According to analysts at Nomura, the CAD outlook remains negative – in the short term, positioning looks stretched and a fragile risk environment hurts the CAD.

Key Quotes

“Over the medium term, we expect relative monetary policy between the Fed and the BoC to push USD/CAD higher. There is also a negative FDI story developing, accentuated by the US corporate tax cuts. The caveat here is that we expect oil prices to remain in higher ranges – which should limit CAD downside. Nonetheless, we think USD/CAD should trade higher, testing 1.31 in the coming months.”