The USD/CAD pair has been trading relatively stable around 1.3500 for several weeks. Commerzbank economists analyze the pair's prospects.
CAD unlikely to continue appreciating against USD in 2025
Given the BoC's cautious stance, we remain comfortable with our forecast for lower USD/CAD levels in the coming quarters. However, we have adjusted the levels slightly upward to reflect the new forecasts of our economists, who no longer expect a recession in the United States.
However, we no longer expect the CAD to continue appreciating against the USD in 2025. This is because the Fed is likely to end its interest rate cuts sooner than the market currently expects as our economists forecast very strong growth in the United States. The Canadian economy is unlikely to be able to withstand it, even if growth there also picks up again.
Source: Commerzbank Research
Source: Fx Street
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