Analysts at the National Bank of Canada point out that despite the uncertainty created by the latest COVID variant, they remain comfortable with their current forecast of USD/CAD pair at 1.20 in 2022.

Key Quotes:

“We still expect the loonie to appreciate further in the coming months. For one, global manufacturing production continues to expand at a relatively brisk pace.”

“Rising commodity prices, a current account surplus, a strong labour market and positive interest rate differentials argue for an appreciation of the Canadian dollar. According to our model, the CAD remains significantly undervalued against the greenback

“Despite the uncertainty created by the latest COVID variant, we remain comfortable with our current forecast of a C$1.20 rate for the US dollar in 2022.”