The Canadian Dollar is expected to trade at 1.29 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 1.31 in 12 months time.
The Canadian dollar weakened 0.3% to just below 1.28 in 2021, despite the volatility, the Loonie outperformed key currencies such as the Euro, Pound, Yen and the Swiss Franc amid a strong economic rebound that allowed the BoC to put an end to its pandemic support sooner than other major central banks while pointing to higher interest rates in 2022. Also, the good performance of oil – a major Canadian export - helped to support the gains, after soaring more than 50%. Still, at the end of the year, the loonie returned to book losses as a more hawkish policy stance from major central banks contrasted with the BoC's last statement. The BoC dashed investors' expectations for a shift to a more hawkish policy stance as the Omicron had raised uncertainty around the economic recovery. At the same time, the Fed signaled three interest rate hikes by the end of 2022, both the BoE and the Norges Bank already hiked their main rates, and the ECB reduced its pace of bond buying.
The Canadian dollar weakened 0.3% to just below 1.28 in 2021, despite the volatility, the Loonie outperformed key currencies such as the Euro, Pound, Yen and the Swiss Franc amid a strong economic rebound that allowed the BoC to put an end to its pandemic support sooner than other major central banks while pointing to higher interest rates in 2022. Also, the good performance of oil – a major Canadian export - helped to support the gains, after soaring more than 50%. Still, at the end of the year, the loonie returned to book losses as a more hawkish policy stance from major central banks contrasted with the BoC's last statement. The BoC dashed investors' expectations for a shift to a more hawkish policy stance as the Omicron had raised uncertainty around the economic recovery. At the same time, the Fed signaled three interest rate hikes by the end of 2022, both the BoE and the Norges Bank already hiked their main rates, and the ECB reduced its pace of bond buying.