CAD likely to continue outperforming on central bank policy divergence – MUFG

Mitsubishi is bullish on the Canadian dollar

Mitsubishi is bullish on the Canadian dollar

MUFG Research maintains a bullish bias on CAD over the medium-term.

“The Canadian dollar remains the top performing G10 currency on a year-to-date basis and this looks set to continue even as crude oil prices take a fall. The driver currently is the expected divergence in the central bank policy path and yesterday Deputy Governor Toni Gravelle in a speech reinforced that prospect by confirming that the BoC was winding down the emergency liquidity programs put in place last year in response to the COVID crisis,” MUFG notes. 

Assuming no major further correction in crude oil prices and assuming the data continues to confirm recovery (very likely), we expect CAD to continue to outperform other G10 currencies,” MUFG adds.

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