USD/CAD to fall to around 1.3% next year – SocGen
|If the US Dollar weakens in general, it is likely to do so against the CAD, too, economists at Société Générale report.
Fed and BoC to ease monetary policy at a similar pace to each other
The biggest drivers of USD/CAD will probably be the general direction of the USD (which we expect to be weaker as US growth slows) and the relative shifts in Canadian and US longer-dated bond yields. A falling US yield environment and a weakening Dollar should drag USD/CAD lower in the absence of fresh new idiosyncratic drivers of the CAD.
In a not very imaginative forecast, we expect USD/CAD to fall to around 1.3% next year, as US yields fall (10s trading down to 3.75%) and the Fed and Bank of Canada ease monetary policy at a similar pace to each other.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.