CAD: ‘April Showers’ Hit CAD; Is It A Buy?

The Canadian dollar suffered from subdued oil prices, Trump’s tariffs and also worries about Canadian housing. What’s next?

Here is their view, courtesy of eFXnews:

CIBC FX Strategy Research notes that CAD was given a kick lower this week after the US imposed duties on Canadian lumber, sparking fears that the trade relationship between Trump and Trudeau may not be as good as initially thought.

This, according to CIBC, has added up to some visible selling pressure for CAD, in a week in which the currency was only mixed against overseas majors.

However, CIBC thinks that CAD has weakened a little too much on the news and is approaching the weaker end of the bound in which CIBC expects to see in the coming 6-12 months.

“That’s the base case, with the CAD regaining a couple of cents by year end. But it doesn’t make the loonie a screaming buy. If the C$ does see a big move this year, the risks are to the weak side,” CIBC argues.

CIBC targets USD/CAD at 1.34 by the end of the year.

USD/CAD is trading circa 1.3650 as of writing.