The loonie is the top-performing forex this yr (not counting the crypto form). Surging commodities, together with a extra hawkish flip by the central financial institution, has pumped the Canadian greenback to six-year highs above 82 cents US. Wanting forward, economists at Financial institution of Montreal forecast the USD/CAD at 1.1750 by late-2022.
A fierce rally in commodity costs fueled the loonie
“Useful resource costs are anticipated to ease reasonably as extra provide comes on-line and as client spending is diverted towards the service sector. Nonetheless, costs ought to stay supportive, and with the Financial institution of Canada prone to increase charges a bit earlier than the Fed, the loonie appears to have discovered its groove.”
“We see the CAD cruising above 83 cents at year-end and to round 85 cents (USD/CAD at 1.175) by late 2022, partly on the again of a softer buck as safe-haven demand ebbs additional.”