Forecasts for the Canadian dollar change all the time, affected by news events and relative sentiment towards the Canadian economy.
19 Nov 2021
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Last year, 2020 the first year of COVID, Canadian dollar forecasts were almost entirely driven by the effects and response to the Coronavirus pandemic rather than any fundamentals of the Canadian economy.
However as we progress through 2021, the Canadian dollar is being buffeted by predictions of rising interest rates, inflation and the oil price as the world starts the slow path to recovery from the pandemic.
This contrasts to last year when CAD exchange rates were very volatile driven almost entirely by the effects of the Coronavirus pandemic rather than any fundamentals of the Canadian economy.
CAD exchange rates have gained amid Canada’s improved economic outlook and recovering oil prices. Early success in controlling COVID-19 has helped the Canadian economy to rebound as massive government aid boosted consumer spending and low interest rates have fueled a surge in the housing market.
Supporting the loonie has been a 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.
Given the outperformance of the CAD in 2021, it was no surprise to see some consolidation in late October as investors took profits. However, heading into November it continues to be the year’s best-performing major currency.
OFX predict the USD could trade between 1.23-1.2550 CAD in November. (CADUSD 0.77-0.80)USD-CAD Outlook
The energy crisis combined with a ‘risk off’ market sentiment has pushed the Pound down against the Australian, New Zealand and Canadian Dollars. These currencies that normally are vulnerable to ‘risk off’ events, showing the impact of the gas crisis in the UK. CAD-GBP Outlook
In November CAD/EUR has risen to around the 0.70 level as the energy crisis hurts the euro and helps the gas and oil exporting Canadian dollar. CAD-EUR Outlook
In September the ‘risk off’ market mood had pushed the Canadian dollar down against the Rupee. Also helping the rupee was speculation the Indian central bank was relaxing its control over INR.
However in October CAD/INR has risen from 57 to above 60, the loonie has been helped along by the end of any election uncertainty and the strong demand for gas from the energy crisis in Europe.CAD-INR Outlook
Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.