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Canadian dollar CAD forecasts for 2020

Forecasts for the Canadian dollar change all the time, affected by news events and relative sentiment towards the Canadian economy. This continually updated article reviews CAD bank forecasts and popular cross-rate trends.

CAD in the markets

September was a relatively stable month for the CAD versus other major currencies. Bank of Canada left rates unchanged at 0.25% for the fourth time, as expected, maintaining its dovish (conservative) tone as the economy faces a slowdown. GDP results have recently exceeded market expectations, however, are still below pre-pandemic levels. Canada faces a second wave of COVID-19 and has reintroduced targeted restrictions to some provinces. The CAD, which had been gaining ground against the US dollar since mid-April, has begun to lose ground. The CAD remains vulnerable to further corrections in risk sentiment as markets re-assess expectations for global growth amid the uncertainty of a second coronavirus wave.

The Canadian economy is in “way better shape” than the Bank of Canada currently believes, analysts at Scotiabank said in May before labelling the loonie a “seriously” undervalued currency.

Experts at Citibank said in June that USD/CAD would likely fall to 1.30 within 6-12 months, from mid-month rates near 1.315, but they cited escalating global trade tensions as a major risk to this forecast.

CIBC is predicting USD/CAD at 1.36 at the end of 2019 but sees CAD weakness towards 1.40 sometime in 2020 (1.40 hasn’t been seen since early 2016).

The combination of an eroded US interest yield advantage, a broadly positive riskon mood and renewed euro demand, could be a catalyst to push the Canadian dollar along. The combination of an eroded US interest yield advantage, a broadly positive riskon mood and renewed euro demand, could be a catalyst to push the Canadian dollar along.

The Canadian dollar was range bound during the second half of 2019 oscillating between US75c and US76.5c. Mid-year the loonie stormed ahead in June and July, rising to what turned out to be the 2019 high against the US dollar of US76.7cents and to 8-month highs against the euro, pound, Australian and New Zealand dollars. Against the Aussie, a minimal additional increase would take CAD to a 9-year high.

Supporting the loonie was a 10 percent rise in the oil price (oil is among Canada’s most exported products but is volatile and can’t be relied upon), a large and welcome jump in inflation, and dovishness at major central banks of the world, including the Federal Reserve, ECB and RBA.

The following sections show a summary of bank forecasts for popular GBP cross rates that we have reviewed, you can view each forecast article for more details.

CAD to USD



 

CADUSD Trend & Alerts

CADUSD at 0.7619 is a little above its 90-DAY average, range 0.7365-0.7665.
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CAD to GBP



 

CADGBP Trend & Alerts

CADGBP at 0.584 is a little above its 90-DAY average, range 0.5689-0.5931.
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CAD to EUR



 

CADEUR Trend & Alerts

CADEUR at 0.6422 is near its 90-DAY average, range 0.6288-0.648.
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CAD to INR



 

CADINR Trend & Alerts

CADINR at 56.25 is a little above its 90-DAY average, range 55.05-56.87.
🔔 CADINR is at 30-DAY HIGHS.
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Alert:30-DAY HIGHS |


 
Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.