Barclays economists expect the loonie to remain resilient thanks to fiscal support, higher oil prices and optimistic growth prospects. They forecast that the USD / CAD will be at 1.21 for the first quarter of next year.
Key statements:
“We remain constructive against the Canadian dollar thanks to the more optimistic growth prospects, extended domestic and external fiscal support and higher oil prices.”
“The economy is proving to be more resilient than anticipated to containment measures for COVID-19 and the narrative of a stronger vaccine deployment in the second half of 2021 along with faster growth in the United States and the world, implies a prop backdrop for coin“.
“We believe that Canada it will be one of the main beneficiaries of the international spill-over effects of President Biden’s stimulus plan, which is in addition to the Canadian government’s extended fiscal support measures (amounting to approximately 3/4% of GDP in three years). “
“We significantly downgrade our estimated trajectory for USD / CAD throughout the forecast horizon and now we expect it to weaken towards 1.21 for the first quarter of 2022. “
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