Analysts at the National Bank of Canada forecast the USD/CAD pair at 1.30 by the end of the first quarter, at 1.27 by Q2 and 1.28 by year-end.
Key Quotes:
“If we’re right about further oil price increases, USDCAD would move closer to our mid-year target of 1.27. Of course, that assumes the global trade picture, and hence world GDP growth, does not deteriorate from here, a possibility we cannot entirely dismiss in light of ongoing negotiations between the U.S. and China.”
“While the case for tighter monetary policy by the Bank of Canada has become weaker in light of a larger-than-expected output gap, slowing credit growth, and enhanced uncertainties with regards to the global economy, that’s not to say the loonie will repeat last year’s disastrous performance. Thanks in part to supply cuts both at home and abroad and the USD’s weakness, oil prices are now rising as we had expected and pushing USDCAD towards our end-of-Q1 target of 1.30.”
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