Canadian dollar will go up on further interest rate lifts

Over the coming year the Canadian dollar is predicted to tack on, as a Reuters survey disclosed on Thursday. The assumption is built around the fact that Bank of Canada interest rate lifts as well as broad pressure on the evergreen buck will compensate uncertainty regarding the future of the NAFTA trade pact.

The survey of more than 40 foreign exchange experts foresaw that the Canadian currency is going to rally up to C$1.250 versus the US dollar just in one month. Following a period of stabilization, in a year the Canadian major currency is supposed to rise to C$1.230.

Canada’s higher interest rates along with positive economic data are expected to assist the country’s major currency, as some financial experts stressed. In addition to this a reduction of the latest fluctuation in the stock market can lend support too.

On Friday, the Canadian dollar rebounded more than 2% since equities started tumbling abruptly. The previous week Loonie demonstrated its strongest outcome for more than four months sticking to C$1.225.

Commodity-linked currencies are used to underperforming when equities go down. It’s because of the signal sent by it on prospects for economic surge worldwide. As a matter of fact, crude turns to be one of the country’s crucial exports.

In January, the Bank of Canada had its benchmark interest rate lifted to 1.25%. That’s its third lift since July, and it drops a hint that the Canadian economy’s approaching its full capacity.

In 2018, money markets expect two further lifts, although economic data will probably require staying sturdy enough to back extra policy tightening.

Loonie is expected to be extremely vulnerable to any dismal data the months ahead. Market experts suggest the Canadian dollar will dive to C$1.27 just in one month and then in a year get back to C$1.23.

Similar

21.06.2022 09:10 Will Fed Chair Powell Move the USD?

The Fed Chair Jerome Powell will testify on the Semi-Annual Monetary Policy Report before the House Financial Services Committee on June 22-23 at 17:00 GMT+3.