The recent rally in the Canadian dollar, which has been driven by rising oil prices and downgrades to the outlook for US interest rates, is unlikely to last beyond the middle of this year. Admittedly, we are forecasting a further small rise in oil prices by year-end, to around $45 per barrel. But the gap between US and Canadian interest rates is likely to widen soon, which will put downward pressure on the Canadian currency. We expect it to end the year at around US$0.73.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services