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If the US Dollar weakens in general, it is likely to do so against the CAD, too, economists at Société Générale report. Fed and BoC to ease monetary policy at a similar pace to each other The biggest drivers of USD/CAD will probably be the general direction of the USD (which we expect to be weaker as US growth slows) and the relative shifts in Canadian and US longer-dated bond yields. A falling US yield environment and a weakening Dollar should drag USD/CAD lower in the absence of fresh new idiosyncratic drivers of the CAD. In a not very imaginative forecast, we expect USD/CAD to fall to around 1.3% next year, as US yields fall (10s trading down to 3.75%) and the Fed and Bank of Canada ease monetary policy at a similar pace to each other.   Source: https://www.fxstreet.com/news/usd-cad-to-fall-to-around-13-next-year-socgen-202312281305

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Filed under: News - @ December 28, 2023 6:14 pm