TORONTO (Reuters) – Canada’s dollar will strengthen over the coming year as rising investor appetite for risk counters a slowdown in the domestic economy that could crimp interest rate hikes from the Bank of Canada, a Reuters poll of currency strategists showed.
Taken Feb. 28-March 5, the poll of over 40 currency analysts predicted the loonie would strengthen to 1.29 to the U.S. dollar in 12 months, or 77.52 U.S. cents.
Forecast - February - Poll - Currency - Percent
That is weaker than the 1.28 forecast in February’s poll but would leave the currency up almost 3.5 percent from Tuesday’s level of 1.3349.
Although the loonie has lost some ground in recent days it has still climbed more than 2 percent since the start of the year, the second best performance, after sterling, among G10 currencies.
Environment - Dollar - Mark - McCormick - North
“The external environment has got much more supportive for the Canadian dollar,” said Mark McCormick, North American head of FX Strategy at TD Securities. “Global risk appetite is, on our metrics, the strongest it has been in years.”
Canada is running a current account deficit and exports many commodities, including oil, so its economy could benefit from an improved outlook for the global flow of capital or trade.
Optimism - United - States - China - Deal
Optimism that the United States and China could reach a deal on trade and signals from the Federal Reserve it would be patient on raising interest rates further have helped...
Wake Up To Breaking News!