USD/CAD: Move below 1.30 will have to wait until 2024 – Scotiabank

Economists at Scotiabank update their USD/CAD forecast. The pair is now expected to trade above 1.30 throughout next year.

Q4 forecast lifted to 1.35

“We are marking the Q4 forecast for USD/CAD to 1.35 (from 1.30) and lifting the 2023 profile for the USD somewhat.” 

“We now only anticipate the USD weakening below the 1.30 the year after next.”

“Relatively firm growth, a hawkish central bank and elevated commodity prices have done little to slow the USD/CAD rise this year and it is hard seeing any of those drivers delivering any additional support to the CAD right now.”

“The CAD retains a very tight, positive correlation with US equities at present and weak risk appetite seems likely to persist while inflationary pressures are elevated and geo-political tensions are high. This will keep the CAD tone soft.”