The Canadian dollar remains the second-best performing G10 currency year-to-date although it has traded on a weaker footing over the past month. Economists at MUFG Bank expect the USD/CAD to hover around the 1.40 level.
Fed remains on course to overtake Bank of Canada in rate hike cycle
“The BoC is expected to bring an earlier end to their rate hike cycle than the Fed reflecting in part expectations that Canada’s economy will prove more sensitive to rate hikes than the US economy given household debt is much more elevated in Canada.”
“We expect USD/CAD to keep moving up closer to 1.4000.”
“While the OPEC+’s recent decision to deliver larger production cuts helps to dampen downside risks for the price of oil, it will not fully ease concerns over a sharper slowdown/recession in Canada that’s been weighing more on CAD.”