USD/CAD is still trading close to its highs for the year. Economists at Commerzbank analyze Loonie’s outlook.
Upward potential in 2024
The Bank of Canada (BoC) suspended its rate hike cycle for the second time in early September and has kept its key interest rate stable at 5% since then. At the same time, the Fed is discussing another rate hike. This difference in monetary policy is currently supporting USD/CAD. In the coming weeks, however, it is likely to become clear that there will be no further rate hikes in the US either.
As we expect a recession in the US next year, while the Canadian economy is likely to achieve a soft landing, we see CAD recovery potential next year.
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