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    Canadian dollar CAD Forecasts

    Forecasts for the Canadian dollar change all the time, affected by news events and relative sentiment towards the Canadian economy.

    Updated: Mar 10, 2023  

    Forecasts for any currency, including the Canadian dollar, can change rapidly and frequently, as they are heavily influenced by various factors such as political and economic developments, market sentiment, and news events. For instance, changes in oil prices can have a significant impact on the Canadian dollar, given Canada’s large oil reserves and export markets.

    Other factors that can affect the Canadian dollar include inflation, interest rates, and GDP growth. For example, if inflation rates in Canada rise faster than expected, the Bank of Canada may need to increase interest rates to curb inflation. This could lead to a stronger Canadian dollar, as investors may be attracted to higher interest rates. Conversely, if GDP growth is weaker than expected, this could lead to a weaker Canadian dollar, as investors may perceive the country as less attractive for investment.

    Furthermore, the Canadian dollar can be influenced by global events and sentiments, such as shifts in market risk appetite or political developments in other countries. Therefore, forecasts for the Canadian dollar are often subject to rapid changes based on new information and shifts in market sentiment, making it challenging to predict long-term trends with a high degree of accuracy.

    Canadian Dollar Forecasts for 2023

    The Canadian dollar struggled against the US dollar in February, but the fate of USD/CAD in March would be dependent on the risk-on and risk-off environments in financial markets, not the fundamentals in the US and Canada, as both economies are strongly correlated. Despite a 425 bps increase in this economic cycle, GDP and Consumer Price Index came in lower than expected in Canada, indicating a possible stall in the Canadian economy.

    This shows that the Bank of Canada might hold the benchmark interest rate at 4.5% on March 8. The OECD projects Canada’s GDP growth at 1% this year versus 3.2% last year, with a risk to the downside. Continued housing price declines and adverse wealth effects could put more negative pressure on the Canadian dollar in 2023.

    CAD to USD 90-Day Currency Trend Chart with Hi, Low, Up, Down AlertsCAD to USD at 0.7366 is just below its 3-month average of 0.7392, having fluctuated within a 4.3% range of 0.7215-0.7524 CAD to USD




    What is a good Canadian Dollar exchange rate?

    Whether the loonie will rise or drop in the future is a difficult question and the answer really depends on many factors. The best way to consider an exchange rate’s relative value is to look at the rate’s history against a range of currencies and in particular against the currency you are interested in exchanging.

    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 GBP

    CAD to GBP 90-Day Currency Trend Chart with Hi, Low, Up, Down AlertsCAD to GBP at 0.5987 is 1.6% below its 3-month average of 0.6086, having fluctuated within a 4.8% range of 0.5925-0.6209 CAD to GBP
    In light of recent FX analyst forecasts and the 3-month price data, the CAD to GBP outlook remains uncertain, as several key drivers are expected to impact the currency pair throughout March. The unexpectedly strong US Jobs Report in February has caused the US dollar to surge against major currencies, while global GDP growth remains sluggish amid an inflationary climate. Additionally, China's improving economy post COVID-zero policy and the historic UBS-Credit Suisse deal are key factors to watch. These drivers will likely influence investor risk sentiment and the FX markets in the coming weeks. The CAD to GBP exchange rate has been trading at 0.5957, which is 2.1% below its 3-month average of 0.6086, having fluctuated within a 4.8% range of 0.5925-0.6209. Factors such as the UK's post-Brexit economic performance and the Bank of Canada's policy decisions may contribute to further rate fluctuations. Economists expect the exchange rate to remain volatile as market participants assess the impact of these events on both currencies. In summary, the CAD to GBP outlook remains somewhat uncertain, with numerous factors expected to affect the exchange rate in the coming weeks. Investors should closely monitor economic developments and central bank policy decisions to gauge the potential impact on the currency pair.

    CAD to EUR

    CAD to EUR 90-Day Currency Trend Chart with Hi, Low, Up, Down AlertsCAD to EUR at 0.6799 is 1.3% below its 3-month average of 0.6889, having fluctuated within a 4.5% range of 0.6710-0.7012 CAD to EUR
    According to recent FX analyst forecasts, the CAD to EUR exchange rate has shown a downward trend from its 3-month average. Over the past three months, CAD to EUR has traded 1.7% below its average of 0.689, with fluctuations in a 4.5% range between 0.6710 and 0.7012. This downturn is attributed to several key drivers that have impacted investor risk sentiment and global FX markets, including a strong US Jobs Report, sluggish global GDP growth, a modest recovery in the Chinese economy, and the UBS acquisition of Credit Suisse. The Euro experienced a decline after a positive US Jobs report and a slightly dovish message from the European Central Bank (ECB) put pressure on the currency. Although economic data showed some growth in the Eurozone, the continued strength of the US dollar has led to a weaker Euro position. The outlook for the CAD to EUR rate will be continually influenced by multiple factors, including policy decisions by central banks, economic data releases, inflation rates, and geopolitical events. In conclusion, the CAD to EUR exchange rate is anticipated to experience continued fluctuations, driven by various factors impacting global economies and investor risk sentiment. Therefore, it is crucial for individuals and businesses engaged in international transactions to monitor the exchange rates, central bank decisions, and economic data to make informed decisions regarding their transactions.

    CAD to INR

    CAD to INR 90-Day Currency Trend Chart with Hi, Low, Up, Down AlertsCAD to INR at 60.59 is just below its 3-month average of 60.77, having fluctuated within a 5.1% range of 59.14-62.15 CAD to INR
    In recent times, the CAD to INR has witnessed fluctuations with the Canadian Dollar trading just below its 3-month average of 60.77 against the Indian Rupee. The currency pair has experienced a 5.1% range within 59.14 to 62.15 during this period. This volatility can be attributed to various key factors such as the unexpectedly strong US Jobs Report, sluggish-global GDP growth amid inflation, and China's relaxation of its strict COVID-zero policy alongside its anticipated economic reopening. FX analysts project a cautious outlook for CAD to INR in the coming weeks due to ongoing market uncertainties, such as global financial market disruption, energy prices affecting India's inflation, and central bank policy expectations. Moreover, interest rate decisions and inflation pressures in both Canada and India are crucial factors that investors should closely monitor. As these driving forces continue to impact investor risk sentiment and foreign exchange markets, it is essential for those looking to make international transactions involving CAD to INR to keep an eye on exchange rates and any potential developments. By staying informed, individuals and businesses can make well-informed decisions to optimize their currency exchange and mitigate potential risks.


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    Factors that impact the value of the Canadian dollar

    There are several factors that can impact the value of the Canadian dollar in the foreign exchange market. Some of the most important factors include:

    1. Commodity prices: Canada is a major exporter of commodities such as oil, timber, and minerals, and changes in the prices of these commodities can have a significant impact on the value of the Canadian dollar.

    2. Interest rates: Higher interest rates tend to attract more foreign capital, which can increase demand for the Canadian dollar and lead to appreciation of the currency.

    3. Economic growth: A strong economy can lead to increased demand for the Canadian dollar, as investors and traders seek to take advantage of the country’s favorable economic conditions.

    4. Inflation: Low and stable inflation can help to support the value of the Canadian dollar, as it suggests that the central bank is effectively managing the money supply and maintaining price stability.

    5. Government debt: Large government debt can be seen as a burden on the economy and can lead to concerns about the country’s ability to service its debt, which can weigh on the value of the Canadian dollar.

    6. Political stability: Political stability can help to create a favorable environment for investment, which can increase demand for the Canadian dollar.

    7. Trade balances: A trade deficit (where a country imports more goods and services than it exports) can lead to a decrease in demand for the Canadian dollar, as foreign countries have fewer Canadian dollars to reinvest in the country. Conversely, a trade surplus can lead to an increase in demand for the Canadian dollar.

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    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.