In the view of economists at CIBC Capital Markets,  the Canadian dollar is set to see modest weakening as slower global growth hits commodities, and the Federal Reserve slightly outguns the Bank of Canada (BoC).

Global slowdown shaves CAD value

“While we expect another nonstandard hike at the September meeting, if it’s a 75 bps move, that won't be bullish for the loonie if the market sees that as the end of the BoC's tightening cycle.” 

“We see USDCAD reaching 1.33 in early 2023, with a widening in the travel services trade deficit and a cooler path for commodities. But a broad softening in the USD that year as the Fed stays on hold suggests that the loonie won't weaken further over the balance of next year. Overall, CAD is still a rangebound currency.”