Account to Account
Canadian Dollar Update
Expected USD/CAD Range: 1.024 – 1.030 Recent Developments: Slightly higher than expected industrial price figures in Canada this morning barely moved the Loonie. The Canadian Dollar remains at one month highs with all eyes now focused on the Fed announcement tomorrow and any clues it might provide as to when the US central bank intends to “taper” its monetary stimulus programs. Also, tomorrow Canadian GDP figures could be a catalyst for a move. The Big Picture: The commodity boom has seemingly ended (or is at least sputtering). Relatedly, Chinese and other emerging market economies have slowed notably. At the same time, the ongoing (admittedly halting) recovery in the US will sooner or later lead to a tapering of the Fed’s policies aimed at balance sheet expansion. Closer to home, Canada’s new central banker shows no inclination towards tightening in the near future. As a result of all of this and not surprisingly, the CAD has declined 5% relative to the USD since the beginning of the year. We expect the CAD to be even lower relative to its US counterpart by the end of the year.