News & analysis

The Canadian economy continued to operate with excess supply at the beginning of the year, even as it reaccelerated from stagnation in 2H23. By doing so, this spurred renewed disinflation progress across all of the Bank of Canada’s inflation measures, leaving policymakers little option but to cut rates in June. With underlying cyclical momentum weak and the Bank of Canada providing little resistance to a further widening in US-Canada rate differentials, we think the BoC has just taken the first of multiple easing steps this year, which once realised by markets should support further CAD depreciation in the coming months. While this leaves us tactically bearish on the loonie, we have revised down our forecasts for USDCAD over the next 3-months, reflecting the slightly more accommodative external backdrop. 

You can read our CAD Outlook in full here:

DOWNLOAD THE FULL REPORT

 

Author: 

Simon Harvey, Head of FX Analysis

 

Disclaimer
This information has been prepared by Monex Europe Holdings Limited, part of Monex S.A.P.I. de C.V. (“Monex”). The material is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is, or should be considered to be, financial, investment or other advice on which reliance should be placed. No representation or warranty is given as to the accuracy or completeness of this information. All entities in the “Monex” group of companies are regulated for different products and services within the jurisdictions in which they operate. Details of the different entities can be found here. Details of the respective entities’ regulated status and available products and services can then be found on the relevant links to the individual jurisdictions’ website.