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Investing.com - UBS expects the USD/CAD currency pair to drop from its current level of approximately 1.3775 both in the short and long term, according to a research note released by the bank.
The Swiss banking giant had previously highlighted this view in its "opportunity of the week" report last week, reaffirming its bearish outlook on the currency pair despite relatively low volatility in the broader currency markets recently.
UBS specifically recommends selling upside risks in USD/CAD above the 1.39 level, indicating the bank sees limited potential for the pair to strengthen beyond this threshold.
The bank notes that next week’s Canadian Consumer Price Index (CPI) data release falls within its one-month forecast horizon for the currency pair.
UBS suggests that the Canadian dollar could strengthen further if the upcoming CPI print comes in stronger than expected, potentially accelerating the predicted decline in the USD/CAD exchange rate.
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