AUD/CAD firmed to 11-month highs of 0.9535 in early April but has since hit the skids, trading below 0.90 into mid-May. In the view fo analysts at Westpac, the pair looks set for a more concerted push lower to the 0.87/0.88 zone.

RBA set to lag the BoC

“The BoC is set to join the 50-club, with ongoing strong jobs and wages data and stubborn 30-year highs for inflation cementing +50bp at their 1st June meeting. The RBA is not standing still either, but whereas that will take the RBA’s cash rate to 0.75%, the BoC’s will be comfortably higher after their June meeting, at 1.5%.”

“With Canada enjoying better fundamentals and the RBA set to lag the BoC, the cross looks set for a more concerted push lower, to the 0.87/0.88 zone in coming weeks.”