Economists at RBC Economics expect the Canadian dollar to hold onto gains until late 2021. USD/CAD remains in a consolidation phase as the pair extends sideways grind around 1.2750.
Key quotes
“The Canadian dollar recovered its pandemic related losses against the US dollar as risk appetite improved. The rebound in equity and non-energy commodity prices supported the Canadian dollar’s rise.”
“The loonie is expected to hold onto its gains in the first half of 2021. As the year progresses, however, we expect the US dollar will start to regain ground with markets likely to look for the Federal Reserve to pare back stimulus ahead of other central banks, including the Bank of Canada.”
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