The upward pressure on USD/CAD has resumed over the last month. Economists at Danske Bank continue to pencil in more topside.

Forecast: 1.34 (1M), 1.35 (3M), 1.36 (6M), 1.36 (12M)

“Looking ahead, we continue to pencil in more topside driven by both broad-based USD strength, shaky global asset markets, tighter global financial conditions and a Bank of Canada delivering less tightening than the Fed.”

“A much improved global growth outlook and/or more dovish central banks mark the biggest downside risk factor to our forecast. On the other hand, a sharp global recession could send USD/CAD considerably higher than in our base case.”

“We now have USD/CAD at 1.34 in 1M (from 1.30), 1.35 in 3M (from 1.33), 1.36 in 6M (1.34) and 1.36 in 12M (1.34).”