The weakness of the US dollar plus oil market volatility are affecting USD to CAD forecasts into 2021
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.
ING saw a tough reality check for CAD with the poor Canadian job numbers. The economy lost 213k jobs in January as unemployment rose from 8.6% to 9.4% and a significant setback after the loonies recent strength.
However, with signs that the oil rally is gaining momentum any upside on USD/CAD should be limited, they said.
Note that forecasts and predictions for the USD/CAD exchange rate change all the time, affected by news events and relative sentiment towards the Canadian and US economies and this exchange rate is even more volatile than usual because of the uncertainties around the Coranavirus pandemic.
The CAD hit its highest level against the dollar in 2.5 years towards the end of 2020, driven by the Canadian employment report, which was stronger than expected sixth time in seven months in November. However, it was experiencing weakness against euro and pound.
What is a good USD to CAD exchange rate?
Whether the US dollar will rise or drop in the future versus the Canadian dollar is a difficult question and the answer really depends on many factors. The best way to consider the current USD-CAD relative value is to check the change in the exchange over a range of periods to the present day. The below table does this for periods going back 10 years.
09 Apr 2021
17 Mar 2021
16 Jan 2021
16 Apr 2020
17 Apr 2016
19 Apr 2011
USD/CAD 10 year historic rates & change to 16-Apr-2021 : 1.2509
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