As in 2021, the Canadian dollar remains range-bound against a strong greenback. Economists at the Bank of Montreal expect the USD/CAD to edge lower towards 1.2350 by end-2022.

Elevated commodity prices to underpin the loonie

“Support from surging oil prices and the first string of current account surpluses in 13 years has been offset by the chance of the Fed outrunning the Bank of Canada to catch up with higher U.S. inflation.”

“We look for the loonie to appreciate moderately to US$0.81 (C$1.235) by year-end, supported by elevated commodity prices.”

See: USD/CAD to tank towards 1.20 as BoC outpace the Fed hiking rates – NBF