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    USD/CAD poised for a test of 1.25 medium term – Westpac Pablo Piovano

    Strategist at Westpac Richard Franulovich believes the pair could slip towards the 1.25 area in the next months.Key Quotes“USD/CAD entering its third month of consolidation circa 1.2650-1.32, but lower levels still seem to beckon into year’s end”.“A much improved domestic growth story will be key, as activity bounces back from the Fort McMurray wildfire disruptions and the Trudeau fiscal stimulus kicks into gear in Q4”.“Oil prices have stalled but still suggest we may be past the low point for the collapse in mining investment too”.“USD/CAD more likely to test 1.25 than 1.35 in summer, though the cleaner and more rewarding trade may well be to buy CAD vs the European currencies, even though that will be a consensus trade. The Nov US presidential election major risk for CAD bulls, USD/CAD (and USD/MXN) likely favourite hedges if polls tighten given Trump’s anti-NAFTA/ immigration stance”.

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