Forecasts for the Canadian dollar change all the time, affected by news events and relative sentiment towards the Canadian economy. But in 2020 CAD exchange rates have been driven almost entirely by the effects of the Coronavirus pandemic rather than any fundamentals of the Canadian economy.
The Canadian dollar is expected to rise in 2021 as a global economic recovery takes hold, with larger gains if the Bank of Canada is seen to be preparing to reduce monetary stimulus, economists say.
Canadian Dollar exchange rates have gained amid Canada’s 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 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 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.
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
If risk sentiment continues to improve, the CAD is well placed to extend recent gains. In the longer term, there is a perception Canada will enjoy a renewed close trade relationship with the US, with Biden as US President. USD-CAD Forecasts
CADUSD at 0.7924 is near average of 0.778-0.806 range.
CAD to GBP
It has been a volatile year for CAD/GBP which has oscillated between in a 8 percent band between 0.56 and 0.60, making it important for British or Canadian expat workers, who represent one of the largest groups remitting money from both countries to keep an eye on the exchange rate.
CADGBP at 0.5775 is 0.8% above average of 0.562-0.582 range.
CAD to EUR
The CAD/EUR rate has dropped around 5 percent since the initial pandemic shock in March, previous to this CAD/EUR had touched 0.70 per euro in late February. This is good news for expat Canadian workers in Europe as they will receive more Canadian dollars back home for their Euros.
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