USD/CAD to stay on a downtrend and hit 1.22 in 4Q22 as delayed hike is no game changer – ING

ING’s bullish view on the Canadian dollar for the rest of the year remains unchanged despite Omicron caution keeps the Bank of Canada (BoC) on hold.

A March hike the first of many

“The BoC statement clearly paves the way for a rate hike in March, which means that the prospect of five rate hikes in 2022 currently priced in by the market remains quite intact.”

“We continue to see the BoC tightening cycle as a positive factor for CAD in 2022, although external factors will play a big role too in directing the currency from now on.”

“Assuming oil prices remain resilient and the global risk sentiment picture stabilises after the recent jitters, we think USD/CAD can stay on a downtrend for the rest of the year and hit 1.22 in 4Q22.”