Canadian dollar has been struggling recently in Forex trading, and the latest forecast from Scotiabank isn’t helping matters. With predictions for a weak loonie through 2017, the currency is once again heading lower.
The latest forecast from Scotiabank calls for the Canadian dollar to possibly bottom out near 73 cents on the US dollar by the end of the year, and then fall even further during 2016. In fact, Scotiabank doesn’t expect the loonie to even reach the 80-cent level against the greenback until 2017.
One of the biggest reasons for this expectation is oil prices. The Canadian dollar had a great run following the 2008 financial crisis, when the Canadian economy held firm as the US economy collapsed, and then as oil prices surged. Now, though, the oil boom is fading and prices remain below $50 a barrel. This is dragging on the loonie and causing problems for the Canadian economy.
Policy divergence is also expected to be an issue. The Bank of Canada is keeping rates low in order to help support the economy, while many expect the Federal Reserve to boost rates soon — maybe as early as next month.
At 15:12 GMT USD/CAD is up to 1.3179 from the open at 1.3158. EUR/CAD is up to 1.4335 from the open at 1.4289. GBP/CAD is up to 2.0069 from the open at 2.0244.
If you have any questions, comments or opinions regarding the Canadian Dollar,
feel free to post them using the commentary form below.