BNP Paribas: CAD to Outperform Most G10 Currencies

The video discusses the outlook for Canadian interest rates, suggesting that the Bank of Canada might lower rates, which is not currently priced into the market. It explores the potential impact on the Canadian dollar and contrasts it with US monetary policy, which is expected to tighten. The discussion also covers the US dollar's performance against other currencies like the yen and euro, and the potential influence of the US administration on dollar policy. Finally, it examines the Canadian dollar's relative strength against other currencies, driven by US growth and stable oil prices.

What is the expected impact on the Canadian dollar if the Bank of Canada lowers rates early in the year?

• The Canadian dollar will fluctuate unpredictably.

• The Canadian dollar will remain stable.

• The Canadian dollar will weaken significantly.

• The Canadian dollar will strengthen significantly.

What could cause a short-term correction in the U.S. dollar against the yen and euro?

• A disruption in the risk environment.

• A sudden increase in oil prices.

• A decrease in U.S. interest rates.

• A strong consensus view among market participants.

How might President Trump's administration react if the U.S. dollar gains significantly due to Fed tightening?

• They might implement new trade tariffs.

• They might remain silent on the issue.

• They might express dissatisfaction with the FX market.

• They might encourage further dollar gains.

Why might the Canadian dollar hold up better than other currencies?

• Due to a significant rise in oil prices.

• Because of spillover benefits from U.S. growth.

• Because of a decrease in U.S. interest rates.

• Due to a decrease in Canadian exports.

What is the expected impact of oil prices on the Canadian dollar in the near term?

• Oil prices will have a neutral impact on the Canadian dollar.

• Oil prices will lead to high volatility in the Canadian dollar.

• Oil prices will cause the Canadian dollar to weaken.

• Oil prices will cause the Canadian dollar to strengthen.