Canadian Dollar To Trend Lower
created by Kyle Conway on Tue 7 Oct 2014
Canadian Dollar To Trend Lower
The Canadian Dollar Is Expected to
Trend Lower
At the start of 2013, one Canadian dollar bought
1.015 U.S. dollars. Since then, the loonie has
lost roughly eight per cent in value against the
U.S. dollar, and the near term outlook for the
Canadian dollar has weakened. Some of the
fundamentals that supported the Canadian
dollar over the last several years have eased,
most notably portfolio inflows into Canada have
slowed and investors have pushed out their
anticipated timing of the first rate hike by the
Bank of Canada.
As the U.S. Federal Reserve begins tapering
its monthly asset purchases,10 we expect a
broadly stronger U.S. dollar and a slightly
weaker Canadian dollar. The loonie is generally
projected to trade in the low 90 U.S. cent range
in 2014. It should receive a boost in 2015 with the
first rate hike by the Bank of Canada projected
for early 2015. The loonie should strengthen to
around 97 U.S. cents by year-end 2015.
