USD/CAD: bullish on the greenback - Scotiabank

Analysts at Scotiabank noted that this week’s domestic release calendar is relatively limited, leaving the focus squarely centered on sentiment and the broader market tone.

Key Quotes:

"Yield spreads are steady at the wider end of their one month range — the 2Y U.S.-Canada spread widening nearly 10bpts over the past week as market participants considered the turn in domestic releases (trade) and assessed the near-term risks posed by the Alberta wildfires. OIS are pricing a roughly 10% chance of a 25bpt BoC rate cut over the next 12 months.

We look to CAD weakness on the basis of near-term domestic headwinds and the broader turn in the USD."