USD/CAD fell to lower ground, but that was because of the poor US jobs report rather than anything related to the loonie. The team at CIBC focuses on CAD:
Here is their view, courtesy of eFXnews:
The past week’s current account figures provided yet another sign that the C$ needs to remain near or slightly weaker than current levels to help correct imbalances within the economy. Remaining at a little over 3% of GDP, the deficit continues to show no improvement with non-energy and services unable to offset the negative impact from oil.
The good news is that, since commodity prices started to fall in mid-2014, Canada’s current account position hasn’t deteriorated as much as another commodity producer—Australia. However, the large deficit is an additional factor weighing against the C$ and another indication that the Canadian dollar will have to stay in the mid-70-cent range to help the economy transition away from commodities and to other growth drivers.
*CIBC targets USD/CAD at 1.32 by the end of Q2 and 1.37 by the end Q3.
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