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.
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).
Growing fears of the coronavirus outbreak has moved the market into safer currencies such as the USD and away from AUD, NZD and CAD.
The threat of proxy war between the US and Iran in Iraq also pared back some of the gains the Loonie had made coming into the New Year.
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 USMCA was signed by the United States, Mexico and Canadian on November 30 at the G20 Summit in Buenos Aires. Any delay to Canadian ratification of the USMCA trade deal would have likely depressed sentiment on Canada’s currency.
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.
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