Bullish Case For CAD Intact

The CAD has enjoyed a solid run over the past couple of months. Remember – it has been one of the least affected risk currencies during the latest round of sell-offs.

The reasons to like the CAD to the upside are still intact. There are also some short-term supporting factors to consider too.

First, there have been plenty of factors supporting the CAD over the past few months.

Positive economic data and dovish tones from the BOC has sparked speculation that the central bank will move towards tapering their asset purchases in the next few months.

This was confirmed with last week’s announcement from BOC’s Deputy Governor Gravelle that the bank is winding down some of its emergency market functioning programmes.

Even though the path of tapering will be gradual, it’s a bold step. This would make the BOC the first of the major central banks to move out of the ultra-easy policy regime.

The other main driver for the CAD has been the strong push in Oil prices. The climb in Oil has been nothing short of spectacular, with gains of more than 80% from November 2020.

With that in mind, attention this week will turn to the upcoming JMMC meeting, as well as the ongoing challenge with the blocked Suez Canal.