Consensus Canadian Dollar Forecast

June 18, 2021 | About

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USD to CAD: Current Price & Daily Updates

Value of USD in Canadian Dollars

  • USD to CAD Update: Why is the Canadian dollar declining all of a sudden? June 17, 2021
    The US dollar has jumped 1.3% since yesterday afternoon and is now trading at its highest level against the Canadian dollar in nearly 7 weeks.  The move comes as the US Federal Reserve delivered a message that indicated more readiness to rein in monetary stimulus than the market expected.  USD to CAD is now at 1.233.  That message brought the US central bank closer to the position of the Bank of Canada which had jumped in front of its peers in projecting reduced asset purchases and rate hikes.  The Bank of Canada’s aggressive posture relative to other central banks had made the Loonie more attractive to investors and has been a major driver of Canadian dollar strength for the last few months.  The Fed’s announcements yesterday remove that relative advantage for the Canadian currency.  First, the Fed raised its expectations for US inflation and GDP growth for this year.  Second, Fed members now sees 2 rate hikes in 2023 whereas previously they expected none until 2024.  While that is not an formal forecast, it does represent the views of the people around the table at the Fed.  Finally Chairman Jerome Powell said officials had begun a discussion about scaling back bond purchases (or “tapering” of monetary stimulus).   The Loonie’s run over the last few months has also been supported by strong oil prices and general optimism about global economic recovery.  Those factors remain in place and will mitigate the potential downside in the Canadian dollar for the near future.    

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Views on USD to CAD

The defining social and economic event of the year has been the COVID-19 pandemic.  The risk of the virus is now receding and the economic restart is in progress in Canada and at various stages around the world.  Here is what is now driving the value of the Canadian dollar.

    • The shape of the recovery.  Will it be a V-shaped or U-shaped recovery?  That is, will the Canadian and world economies approach something like their previous levels relatively quickly?  Currently, the markets are largely pricing in a V-shaped recovery aided by massive fiscal and monetary stimulus.  A quick global economic recovery will be positive for the Canadian dollar.
    • The new normal.  What will the new normal look like?  When we return to “normalcy”, what will that look like and what will be its economic impact?  For the Canadian dollar, it will be interesting to watch the lasting effects of the impact of the pandemic on global trade flows and trade relations.  Any tension on trade, whether caused by the virus, or just catalyzed by it, will be negative for the Canadian dollar.
    • Impact of fiscal and monetary stimulus.  What will be the secondary effect consequences of the huge monetary and policy initiatives taken by various governments around the world?  The government of Canada and the Bank of Canada have engaged in unprecedented stimulus efforts.  When will they retrench?  What will be the impact of these actions for the Canadian economy which unlike the US economy is not supported by the world’s reserve currency.
    • US versus Canada.  An important driver of the US to CAD exchange rate in the medium term will be the strength and nature of the recovery here in Canada relative to that in the US.  For that, we will be closely watching economic reports from both countries.  The stronger the relative recovery in Canada the higher the Canadian dollar.
    • The price of oil.  Oil prices have seen a significant recovery from the lows of April.  If oil trades consistently at levels that make it a meaningful contributor to the economy, then expect to see the correlation between oil prices and the Canadian dollar to return.
Canadian Dollar Forecast

USD to CAD Daily Updates

Daily Updates
June 17, 2021

USD to CAD Update: Why is the Canadian dollar declining all of a sudden?

The US dollar has jumped 1.3% since yesterday afternoon and is now trading at its highest level against the Canadian dollar in nearly 7 weeks.  The move comes as the…
Daily Updates
June 16, 2021

USD to CAD Alert: Canadian dollar at lowest level since early May in response to Fed statement

USD has jumped to its highest level since early May as the US Federal Reserve delivered a statement that is decidedly more restrained in its stated willingness to continue monetary…
USD to CADDaily Updates
June 15, 2021

USD to CAD Update: Why is the Canadian dollar trading down this week despite strong oil and equity prices?

Over the last couple of days, oil prices have risen to pandemic-era highs and are approaching the highest levels since 2014.  Stock indices have stabilized at or near record levels. …
November 19, 2020

Is the Canadian Dollar Exchange Rate Going Up or Down?

Summary:  Our qualitative view of the Canadian dollar exchange rate is broadly in line with the Interchange Financial Consensus Forecast.  The Canadian dollar will be largely rangebound but strengthen modestly…
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November 19, 2020

What is the best way to transfer money to the UK from Canada?

You need to send money to the England, Scotland or Ireland. What is the best way to go about it? How do you get the best exchange rate? Figure out…
Money Saving Tips
September 9, 2020

What is the best way to send money to a US bank from Canada?

You need to transfer money from a Canadian dollar account to a US dollar bank account in the US.  What is the best way to do it? Here are some…

The IFC Consensus Canadian Dollar Forecast is based on the aggregation of forecasts by major Canadian and Global banks and trading houses. The methodology used to calculate the forecast takes into account, among other things, the historical accuracy of the forecaster as well as other factors deemed relevant. Short Term refers to forecast for the end of the current quarter. Long Term refers to the forecast for the end of next year. The IFC Canadian Dollar Consensus Forecast is updated periodically.

The contents of this site are for information purposes only, and represent the personal views of the authors. It is not intended in any way as a recommendation to trade, nor does it construe advice whether to buy or sell. No responsibility can be held arising from any loss following consideration of this information. For information specific to your situation you should consult your relevant advisor or investment, legal or accounting professionals. All exchange rate figures displayed on this website are based on interbank exchange rates. These are not trading levels and are for indicative purposes only. Information provided is believed to be reliable when posted. Interchange Financial Corporation (“IFC”) does not guarantee its accuracy and information may change without prior notice. IFC is not responsible in any manner for direct, indirect, special or consequential damages however caused, arising out of the use of this web site.