The Canadian dollar
is entering June with a weakening bias, responding to the broader shift in the US dollar
amid a reassessment of the balance of risks to U.S. growth. For CAD, the key development appears to have been a re-balancing of drivers, with a rising focus on the relative central bank
policy outlook amid an ongoing moderation in concern over the oil
price shock. Oil
price movement will remain a key risk for CAD; however, its significance appears to be fading with the BoC’s shift in focus toward the U.S. recovery.
My CAD forecast looks to modest downside into year-end, with a Q4 target of ( USDCAD
Technical wise, I believe this a good entry point to go long off a couple of weeks of price retracement and a bullish
indicating USD buying.