The Canadian dollar is making modest headway against the US dollar this morning. The Canadian dollar has been pushed up by higher crude oil prices and broad US dollar weakness as global markets continue to be buoyed by a more optimistic outlook.
The increased optimism from investors is primarily being driven by a strong belief that interest rates have peaked, and rate cuts are on the way. Interest rate futures indicate a more than 50% chance that the Fed will lower rates by at least a quarter of a percentage point by May 2024. This sentiment has buoyed investors, pushing up stocks, with the S&P 500 up nearly 9% in November alone.
The broad US dollar weakness has primarily been driven by the fact that the US economy, which was outpacing the rest of the world, will eventually fall back and the gap between the US and the rest of the developed economies is shrinking. The general perspective is that the US dollar will also lose its luster in 2024.
The Canadian dollar is currently trading at 1.3569 CAD against the US Dollar.
