🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

BofA turns bullish on EUR/CAD amid rate and commodity signals

Published 05/21/2024, 09:13 AM
© Reuters.

Bank of America (BofA) shifted its stance to a bullish view on the Euro versus the Canadian dollar (EURCAD) for the current week. The bank's positioning analysis indicates an expectation for the continuation of the spot uptrend. Additionally, BofA's Cross-Asset Risk Analytics System (CARS) model supports a bullish EURCAD outlook based on positive signals from interest rates and commodities.

The market is currently debating whether the Bank of Canada (BoC) will begin its rate-cutting cycle in June or July. The upcoming Canadian Consumer Price Index (CPI) release, if it aligns with consensus expectations, could mark the first instance since 2021 of both median and trim core CPI measures dropping below 3%.

An on-target CPI reading might increase the likelihood of a June rate cut by the BoC. BofA suggests that such an outcome could result in a rise in the EURCAD exchange rate, as expectations for BoC rate cuts move closer to those of the European Central Bank (ECB).

The bank's analysis implies that the Canadian CPI data, due for release this week, plays a crucial role in the potential movement of the EURCAD pair. Should the CPI figures come in higher than anticipated, it could pose a risk to BofA's bullish forecast for the currency pair.

The bank's outlook hinges on the premise that a consensus-matching CPI will potentially prompt an earlier start to the BoC's rate-cutting cycle. This development, in turn, is expected to favor the Euro against the Canadian dollar in the near term.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.