Reuters Poll Shows Loonie Rising But NAFTA A Question Mark
Alfonso Esparza | Aug 10, 2018 09:00
Canada’s dollar will rise over the coming year as the Bank of Canada hikes interest rates and higher oil prices become more supportive of the currency, a Reuters poll showed, but it will take a NAFTA trade pact deal to trigger more optimistic gains.
The poll of more than 40 foreign exchange strategists predicted the Canadian dollar, which has been pressured this week by a diplomatic dispute between Saudi Arabia and Canada, will edge higher to C$1.30 to the greenback, or 76.92 U.S. cents, in three months, from C$1.3023 on Wednesday.
The currency is expected to climb further to C$1.26 in a year, matching the forecast of the July poll.
“The core of the loonie outlook for us is that Canada has one of the very few central banks, arguably the only central bank, that is on a hiking cycle that is broadly comparable to what the Federal Reserve is doing,” said Ranko Berich, head of market analysis at Monex Canada and Monex Europe.
The Bank of Canada, which expects the rate of the country’s economic growth to accelerate to 2.8 percent in the second quarter, has raised interest rates twice since January to match the pace of the Federal Reserve this year.
Money markets expect the Bank of Canada to hike once more by December. Its benchmark interest rate is 1.75 percent.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.