The Canadian dollar (CAD) remains the best-performing G10 currency – outside of the USD – so far this year. Economists at Scotiabank expect the USD/CAD pair to end the year trading around the 1.27 level.

Outlook revised but positives remain

“We have relented on our bullish prognosis for the CAD in H2 2022 and now look for USD/CAD to hold near current levels over the balance of the year (ending 2022 at 1.27).” 

“We continue to believe that our underlying fundamental story – we are forecasting relatively higher growth and tighter monetary policy in Canada over the US this year and next as well as relatively firm commodity prices – merits a stronger CAD forecast, however.” 

“We target USD/CAD declining to 1.23 into the end of 2023.”