CAD: Further Downside On The Cards?

06/26/2020

Credit Agricole Research discusses CAD outlook and adopts a bearish bias over the coming weeks.

"The CAD was on the back-foot for most of the week. This is mainly due to returning risk aversion coupled with weaker energy prices. Rating Agency Fitch downgrading the country by one notch to AA+ did not help either, although Canada's outlook is expected to be stable from here, regardless of considerably higher public debt ratios," CACIB notes.

"We believe shortterm caution is likely to be warranted, even though broadly balanced speculative positioning suggests there is only limited room for position squaring-related downside left unless risk aversion rises more considerably," CACIB adds.