Late on Friday Goldman Sachs noted that “the rapidly shifting macro backdrop has required us to reassess our outlook for currencies of commodity exporters. We think that global slowdown fears will likely weigh on high-beta, pro-cyclical currencies like AUD, NZD, and CAD, and as a result we have revised our near-term forecast paths for those currencies weaker. CAD’s disappointing performance this year can broadly be attributed to poor risk sentiment, as well as only a slow turn in capex in the oil sector. At the same time, CAD should be relatively more insulated from growing concern surrounding the global growth vs other pro-risk currencies due to correlation with the broad U.S. Dollar. Moreover, given the monetary policy outlook for Canada vs the U.S. and the fact that higher oil prices should support the currency, we stick with our broadly constructive outlook over the next 12 months. We are raising our 3-, 6- and 12-month USD/CAD forecasts to C$1.29, C$1.25, C$1.20, respectively (from C$1.22, C$1.20, C$1.18 previously). On the other hand, we remain more tactically cautious on AUD and NZD given the current risk backdrop and the latest broad USD move higher. In the near term, geopolitical volatility and China's slowdown should weigh negatively on AUD and NZD. Over the longer run, these currencies should benefit from a weaker USD and improving risk backdrop, even though we expect the RBA to remain a laggard relative to other G10 central banks. As a result, we now see AUD/USD at $0.68, $0.72, $0.73 in 3, 6, and 12 months (vs $0.73, $0.73, $0.73 previously) and NZD/USD at $0.63, $0.67, $0.68 in 3, 6, and 12 months (vs $0.68, $0.68, $0.68 previously). Therefore, considering the outlook for pro-risk assets over the next 3-6 months, we are opening a tactical trade recommendation to go short AUD/CAD with a target of C$0.87 and stop of C$0.93.”