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The Canadian economy will gather some momentum in the future according to analysts at Wells Fargo. They remain relatively positive on the Canadian dollar’s prospects and look for the currency to strengthen against the greenback over the medium to longer-term. 

Key Quotes: 

“We expect the Canadian economic recovery to gather some momentum over the medium- and longer term as progress is made on the vaccine front and oil prices remain supportive, while government stimulus measures should also underpin the economic expansion.”

“We remain constructive on the Canadian dollar’s prospects, and expect the currency to gain over time. As the global economy strengthens, oil prices and global equities should continue to rise, which should also support the currency, and we target a USD/CAD exchange rate of CAD1.2200 by the middle of 2022.”

“We see the risks as tilted toward an even faster pace of appreciation given the resilience of the Canadian economy so far, and the fact that the near-term economic slowdown could be brief.”