USD/CAD: Citi sees pair climb as high as 1.42 this quarter

Citi analysts expect the USD/CAD to rise towards 1.42 during this quarter.

"The continued weakness in oil prices will weigh on the incomes of Canadian exports and most likely have a negative impact on the CAD.

Secondly, the surprise index linked to Canadian economic data has recently plunged. It is the lowest among the major currencies. For example, the core CPI index has slowed to -0.3% compared with +0.3% in October. Year to year growth fell to -0.2% compared with +0.1% in October.

On the technical front, Citi notes that the pair continues to be supported by the 20MA. This suggests that the cross could climb up to 1.40-1.42. Support is at 1.3721." says Citi.