Economists at CIBC Capital Markets see the Canadian Dollar stuck in neutral in Q1 as markets are almost fully priced for BoC and Fed action, before gaining ground over the rest of 2023 as the USD falls out of favour.

USD/CAD to reach 1.28 in 2024

“With markets almost fully priced for both the Bank of Canada and Federal Reserve over the rest of Q1, expect the Loonie to be stuck in neutral in the near term, with USD/CAD likely ending the quarter at 1.34.”

“We expect USD/CAD to end the year at 1.31.”

“With global growth likely to receive a lift as central banks outside of North America start to normalize policy rates, and higher commodity prices benefitting Canada’s export sector, look for USD/CAD to reach 1.28 in 2024.”

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