US presidential election is the major risk factor for USD/CAD - Westpac

Richard Franulovich, Research Analyst at Westpac, suggests that the USD/CAD remains stuck in the middle of recent ranges, severely lacking in momentum.

Key Quotes

“That said, the recent weaker track in oil prices risks pushing USD/CAD up through 1.3150 near term.

We doubt such a bounce would have legs though and would look to fade strength. The local H2 growth outlook looks solid as activity bounces back from the Fort McMurray wildfire disruptions and as Trudeau's fiscal stimulus kicks in in Q4. Against that backdrop USD/CAD is more likely to test 1.25 than 1.35 in H2 2016 and to outperform on multiple crosses.

The US presidential election is the major risk factor for USD/CAD. A tight race will see USD/CAD firm given Trump’s antiNAFTA/immigration stance.”