JPMorgan expects weak Canadian growth and the resulting dovish Bank of Canada (BOC) expectations to power USD/CAD higher to 1.36 in the first quarter of 2020.
The currency pair is currently trading at 1.3286, representing a 2.6% drop on a month-to-date basis.
Key points
Bank of Canada to cut rates in January.
The Canadian dollar is likely to underperform against low-yielding currencies like the Euro and Swiss Franc.
Canadian dollar could do well against cyclical G10 currencies like AUD which are facing their own internal headwinds.
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