FXStreet reports that loonie’s recovery is losing momentum and though economists at RBC Economics expect the Cadandian dollar to stay robust in the first half of 2021, the USD/CAD is set to recover toward end-2021.

“A partial recovery in WTI and stronger pickup in other commodity prices has helped the Canadian dollar, but it’s a broadly weaker US dollar that is really flattering the loonie.” 

“With the US likely to lead the recovery among developed economies next year, we don’t see the US dollar continuing to lose ground. The Canadian dollar is expected to hold onto its recent gains over the first half of next year before drifting lower toward the end of 2021 and into 2022 as markets begin to contemplate rate hikes by the Fed.”