He Canadian dollar (CAD) has retreated a bit in the early stages of the new year, after having experienced a significant recovery until the end of 2023. Economists at Scotiabank analyze the prospects of the CAD.
CAD expected to rebound in Q2 and Q3
Headwinds for the CAD remain negative spreads against the USD and currently low commodity prices.
In the short term, CAD losses could extend a little further, but the 1.3500/1.3600 area could offer some (technical) value for CAD.
Seasonality turns positive for the CAD in the second and third quarters, and lower rates globally in the coming months will be positive for risk appetite (and, by extension, the CAD).
We expect the Fed to cut rates more aggressively than the BoC through 2025, which should result in a compression of forward yield spreads supporting the CAD in the coming months.
USD/CAD – Q1 2024 at 1.3300, Q2 2024 at 1.3300 Q3 2024 1.2800 Q4 2024 at 1.2800
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
