USD/CAD: Canadian dollar will continue to benefit from higher oil price – Goldman Sachs

In the view of the analysts at Goldman Sachs, the Canadian dollar’s upward trajectory is likely to continue over the next three months amid hawkish Bank of Canada (BOC) and firmer oil prices.

Read: USD/CAD Price Analysis: Bears move in and eye test of 1.2410/30

Key quotes

"Despite the Bank's more hawkish tone and the fairly aggressive pricing of hikes in the rates market, which was pulled forward further following the meeting, CAD has underperformed our models by about 1% in October." 

"While market pricing has accelerated across much of the G10, CAD is still one of our preferred longs in the region, particularly as it should benefit from higher oil prices over the next 3 months, the currency remains undervalued, and the BoC remains responsive to positive inflation surprises."