Economists at Wells Fargo expect the loonie to remain under pressure in the short-term. However, the Canadian dollar could enjoy a brighter outlook next year.

CAD unlikely to find support in the near-term

“Even with elevated Canadian interest rates, we do not expect much Canadian dollar support in the near-term while the Fed remains firmly in tightening mode.”

“We think the prospects for a Canadian dollar rebound will improve in 2023 as the US economy enters recession, and as the Fed begins easing monetary policy during the second half of next year.”