The Canadian dollar (CAD), the best performing major currency of 2019, may have a tough time in 2020, as Bank of Canada (BOC) will be quick to try to curtail a significant rise, according to Shahab Jalinoos, global head of foreign-exchange strategy at Credit Suisse.
The key risk is the BOC itself, which tends to talk more dovishly whenever CAD shows material strength.
The Bank of Canada’s search for a new chief may “create some uncertainty that hinders CAD appreciation.
The CAD rose 5% against the US dollar in 2019, as the BOC kept rates steady, bucking the global easing trend. A recovery in the commodity prices in the fourth quarter also put a bid under the Canadian dollar.