George Davis Currency Report | A Canadian Dollar Video Series

George Davis, CMT is the award winning Chief Technical Analyst for Fixed Income and Currency Strategy for RBC Capital Markets. 

January 2020

In the January 2020 installment, George touches upon 3 key recent developments that have impacted the Canadian market along with his expectation for monetary policy for the first half of the year. 

Click Here to Watch the Video

 

December 2019

In this edition of the George Davis Currency report, George discusses our 2020 economic outlook and forecast revisions. the lingering uncertainty around the US/China trade negotiations and layered hedging strategies. 

Click Here to Watch the Video

 

November 2019

In this installment, George talks about the Canadian Dollar trading in the bottom end of the 1.3000 - 1.3500 range over the last month on the back of a steady Business Outlook Survey, despite ongoing trade tensions.

Click Here to Watch the Video

 

October 2019

In the October 2019 installment of the George Davis Report, George discusses the BoC’s steadfast policy stance compared to the Fed, the factors supporting and weighing on the Canadian Dollar, and the widening 2YR Interest Rate Differential between Canada and the U.S.
 

September 2019

In the September 2019 installment of the George Davis Report, George discusses the BoC’s steadfast policy stance compared to the Fed, citing strong Q2 GDP and August employment and on-target inflation, which resulted in the BoC maintaining their neutral policy stance at the September meeting.

 

June 2019

This month, George discusses how a change in interest rate expectations in both the US and Canada have led to a compression in the US-CA interest rate spreads, resulting in a downward shift in bias for USDCAD.
 
 
May 2019
In this installment, George discusses how recent economic developments corroborate changes made to CM's interest rate forecast back in April. 
 

April 2019

George highlights the changes to RBC Capital Market's interest rate forecast, resulting in both the FOMC and BoC remaining on hold for this year and 2020, likely resulting in CAD weakness amongst broader-based USD strength towards the end of the year.

 

March 2019

In this month's installment, George discusses the recent impact of the weaker-than-expected CA Q4 GDP print in early March that resulted in the a dovish statement from the BoC, likely delaying any rate hike by the Bank to well into the second half of the year. 
 

February 2019

Don't miss this month's edition of The George Davis Report - where George revises his forecast for the Canadian dollar and explains why the Bank of Canada will most likely delay pending interest rate hikes into the second and third quarter of 2019.
 

January 2019

George discusses how oil prices serve as an important proxy for the risk backdrop and how recent weakness led to lower near-term growth and will likely delay rate hikes by the BoC to Q2 and Q3 of this year.

 

December 2018

In this installment, George discusses his 2019 outlook for economic growth along with implications for monetary policy and the Canadian dollar. At the December BoC meeting, George highlights the Bank's increased cautious tone stemming from a weaker Q3 GDP report and the sharp decline in oil prices.
 

November 2018

In the November installment, George discusses the BoC's estimate for the neutral rate, expectations for a more data dependent BoC and the drivers of the USDCAD that will keep the currency entrenched in the 1.3000 area into year-end.
 
October 2018
 
This month George addresses the new USMCA trade deal as generally being positive for the Canadian economy as it removes much of the trade-related uncertainty overhanging the market. He then reiterates that CM's forecast for 2.1% growth this year and 2% next year will remain as is, given it was made under the assumption of a positive outcome in trade negotiations. 
 
 
September 2018
 
In this installment George explains that the 1.2800 - 1.3300 trading range advocated over the last 3 months is likely to persist for the month of September as we deal with the BoC's policy stance and lingering NAFTA trade uncertainty. 

 

August 2018

In this installment of the George Davis Report, George discusses how recent strength in Canadian data underlined the need for the BoC to maintain a hawkish bias at their July meeting resulting in expectations for one more rate hike this year followed by hikes in Q1 and Q2 of 2019.

 

July 2018

This month George discusses how the strength of the Q2 Business Outlook Survey and RBCCM's forecast for above potential growth for 2018 will impact the USDCAD in the second half of the year. 

 

June 2018

In this installment George discusses the recent increase in uncertainty brought about by falling oil prices which may have bearish implications for CAD, the US imposition of steel/aluminum tariffs and lastly the ongoing NAFTA negotiations which could drag on into next year. 
 

May 2018

We are pleased to bring you the latest edition of the series produced by our colleagues in RBC Capital Markets, hosted by George Davis, CMT, the award winning Chief Technical Analyst for Fixed Income and Currency Strategy. In this instalment George discusses the rationale behind recent changes to the CAD forecast for the remainder of 2018. 
 
April 2018
In this installment George discusses the ongoing challenges of the NAFTA negotiations and that headline risks for CAD are likely to persist through the month of April.  If you have any questions about the video or wish to discuss any other Foreign Exchange matters, please contact us at 506-458-2253.
Click Here to Watch the video
 
March 2018
In the March 2018 installment of the George Davis Report.  George discusses how current weakness in CAD materialized due to weaker economic data namely Q4 GDP (1.7% vs 2.5% expected) and an increase in trade related uncertainty.
 
February 2018
In the February 2018 installment, George highlights expected short-term hurdles for CAD appreciation from January’s highs taking USDCAD up to 1.28 to end Q1, followed by moderate CAD strength taking USDCAD to 1.22 at year end.
 
January 2018
In this installment George highlights recent economic developments, namely the stellar December jobs report, a sustained pickup in wage gains and a very firm Q4 Business Outlook Survey that have led to a forecast change for the BoC heading into 2018.  
RBC CM now expects an additional hike from the BoC at their 17Jan meeting (originally calling for a pause here) and a hike in each of Q2, Q3 and Q4 - essentially adding one more hike to their interest rate profile for 2018.  Although this extra hike should establish a lower ceiling for USDCAD in the 1.2800 – 1.3000 area, with reduced downside risks for CAD, NAFTA still presents some headline risk as contentious negotiations continue 23Jan in Montreal.  
 
December 2017
In the December 2017 installment of the George Davis Report, George provides a brief summary of CM's economic outlook for 2018 and the implications to the trajectory of the Canadian dollar.
 
November 2017
In the November 2017 installment of the George Davis Report, George reiterates that the current USDCAD corrective phase still has merit into Q1 18 given the recent cautious tone from the BoC.
 
October 2017

Don’t miss this month’s edition of The George Davis Report – where George discusses a corrective phase for the Canadian Dollar following the Bank of Canada’s September rate hike as well as the importance of increasing core inflation rates going into 2018.

Click Here to watch the video

 
September 2017 

In this installment, George Davis, CMT, will highlight some of the changes made to CM's growth, interest rate and foreign exchange forecasts, brought about by the surprise Bank of Canada interest rate hike. If you have any questions about the video or wish to discuss any other Foreign Exchange matters, please contact us.

Click Here to watch the video

 
August 2017 

We are pleased to bring you the latest edition of the series produced by our colleagues in RBC Capital Markets. In this installment, George discusses the differences between technical and fundamental analysis and why CM turned bearish technically on USDCAD prior to updating their fundamental forecast. George also mentions that USDCAD is at its most oversold levels in 3 years, increasing the probability of a correction in CAD over the next 2-4 weeks.

Currently, the market has fully priced in an interest rate hike by the BoC for October and another for April 2018. CM feels that the interest rate market is overdone in this regard and that the BoC will pause in the first half of next year. As these expectations are repriced, we are likely to see some weakness in CAD. 

Click Here to watch the video

July 2017

In this installment, George will discuss the surprise shift by the BoC from neutral to a more hawkish bias, citing an up to 2-year lag in inflation and very strong domestic growth over the last three quarters, averaging 3.5%. The BoC now feels that past rate cuts have done their job and the economy has adjusted to lower oil prices. 

With two BoC hikes expected this year (July and October) and with only one more hike from the FED, a more positive backdrop for CAD should result over the short term, hitting 1.27 in Q3 and 1.30 in Q4.  In revising their interest rate forecast for 2018, RBC CM now expects 4 rate hikes from the FED, pushing USDCAD higher as the BoC pauses in Q1/Q2 to assess economic conditions, before resuming in Q3 and Q4.

Click Here to watch the video

June 2017

In this installment, George will discuss the recent strength in Canadian data, culminating with the Q1 GDP report of 3.7%, the third consecutive quarter of above trend growth. Although this is raising the possibility of a BoC hike this year, RBC CM does not expect any rate action until the first half of next year as the Canadian economy still has excess capacity and inflation is below target.

With the Fed expected to hike twice this year and the BoC on hold, this policy divergence should move the USDCAD up to 1.38 in Q3 and 1.40 by year end. CAD strength is expected next year as the output gap closes. 

Click Here to watch the video

May 2017

In this installment, George will discuss the rationale for continued weakness in the Canadian Dollar, (housing market, decline in oil prices, US trade front), including revising the Q4 USDCAD forecast up to 1.40 (from 1.38).   If you have any questions about the video or wish to discuss any other Foreign Exchange matters, please contact us.

Click Here to watch the video