Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Dollar Set to Slide Versus Canada Peer on Fed, BNP Paribas Says

Don't Miss Out —
Follow us on:

July 12 (Bloomberg) -- Investors should bet the dollar will fall against its Canadian counterpart on expectations the Federal Reserve will introduce more stimulus, according to BNP Paribas SA.

Enter the trade of the U.S. dollar against the Canadian currency at C$1.0240 with a target of 98 cents, Steven Saywell, head of currency strategy for Europe at BNP Paribas in London, wrote in a note to clients today. The trade should be abandoned if the greenback rises to C$1.0446, he said.

BNP expects the Fed to undertake this quarter a third round of asset purchases, known as quantitative easing. Yesterday, minutes from the central bank’s June meeting signaled some policy makers would support implementing more stimulus if the economy slows further.

Fed action “should boost risky assets, lower the risk premium and weaken the the U.S. dollar,” Saywell wrote. “The Canadian dollar should be one of the principal beneficiaries.”

Canada’s currency, nicknamed the loonie for the image of the waterfowl on the C$1 coin, rose 0.1 percent to C$1.0184 at 3:21 p.m. in New York. It last traded at 98 cents in April. The loonie is the second-best performer this year against nine-developed nation counterparts, after New Zealand’s dollar, according to the Bloomberg Correlation-Weighted Indexes.

Increases in U.S. stocks and the price of Brent crude oil would also lead Canada’s dollar to strengthen, Saywell wrote. Brent oil for August settlement rose 0.9 percent to $101.14 a barrel after the U.S. announced more sanctions against Iran. The Standard & Poor’s 500 Index fell 0.3 percent to $1,337.96.

To contact the reporter on this story: Lindsey Rupp in New York at lrupp2@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.