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1 Mar 2013
Forex Flash: CAD continues to underperform - BTMU
Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the Canadian Dollar is continuing to underperform alongside recent disappointing economic data from canada, but also reflecting investors downgrading their economic growth projections for the US.
He writes, “The sequester spending cuts will begin hitting the US economy from today totaling USD85.4 billion in the fiscal year to the end of September 2013 split evenly between defense and non-defense spending. The Congressional Budget Office has warned that growth could be 0.6 percentage points slower due to sequestration, with potentially 750k fewer jobs created by the end of 2013. It could begin to weigh upon the US dollar by increasing Fed QE3 expectations.”
He writes, “The sequester spending cuts will begin hitting the US economy from today totaling USD85.4 billion in the fiscal year to the end of September 2013 split evenly between defense and non-defense spending. The Congressional Budget Office has warned that growth could be 0.6 percentage points slower due to sequestration, with potentially 750k fewer jobs created by the end of 2013. It could begin to weigh upon the US dollar by increasing Fed QE3 expectations.”