CAD: On a strong footing – BBH

Marc Chandler, Global Head of Currency Strategy at BBH, points out that since the beginning of May, the Canadian dollar has been the strongest of the major currencies, appreciating by 6.0%.  

Key Quotes

“It boasts the fastest-growing economy in the G7. The central bank has clearly signaled its intention to raise rates and a move is nearly fully discounted at next week's meeting (July 12).  Following a strong employment report before the weekend, the Canadian dollar extended its recent gains to reach its best level since last September, with the US dollar pushing below CAD1.29.   The technical indicators are getting stretched but are not yet turning.   Assuming the BoC leaves the door open for another rate hike before the end of the year, and given the speculative position, we suspect the US dollar can approach CAD1.28.”