USD/CAD pushed higher and touched its strongest level since October at 1.3817. Economists at MUFG Bank expect the Loonie to remain under pressure.
Clear policy divergence lifting USD/CAD
“While we expect the US economy to slow more as well in response to higher rates it is happening with more of a lag that is opening up a widening policy divergence between the BoC and Fed in the near-term.”
“Short-term yield spreads between the US and Canada have hit fresh highs this week taking out the highs from late last year, and are placing further upward pressure on USD/CAD that has jumped from around 1.3600 to 1.3800.”
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- Source: https://www.fxstreet.com/news/usd-cad-policy-divergence-pummels-the-loonie-mufg-202303091401