USD/CAD: Further moderate Loonie recovery potential in the medium term – Commerzbank

FXStreet Insights Team FXStreet

Until mid-May, the CAD found it difficult to stand its ground against the USD. Recently, however, it has been able to make up some lost ground. Economists at Commerzbank share their USD/CAD forecast.

BoC ended interest rate pause

The Bank of Canada surprisingly ended its interest rate pause at the beginning of June and raised the key interest rate to 4.75%. Further steps are expected.

We see further limited CAD recovery potential against the USD due to the robust economy and a hawkish BoC. CAD should benefit if the interest rate differential between the Fed and the BoC narrows or turns positive in the medium term.

EUR/CAD should reflect the interim EUR strength we expect.

Source: Commerzbank Research

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FXStreet Insights Team

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The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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