The JP Morgan analysts are out with their latest forecast on the USD/CAD pair, predicting a weaker Canadian dollar in the coming year.
“The foundation on which CAD outperformed this past year is liable to dissipate into 2020.
This is due largely to the fact that the foremost drivers of 2019 cyclical outperformance in Canada were temporary phenomena.
Canada will be more vulnerable to a local growth slowdown in 2020, to the detriment of CAD, particularly as we expect a [Bank of Canada] cut in January.
The main drag on the Loonie is softer global growth and dissipating temporary local factors.
Despite our expectations that Canada loses its cyclical exceptionalism and CAD unwinds some of its outperformance, the resulting currency weakness will be only modest, rather than large and broad.
First and foremost, CAD should retain a decent yield buffer, as we are only calling for a reversion to trend growth (albeit the lower end of potential), rather than a sharper, sustained sub-trend rate or even contraction.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.