As the Dollar corrected lower during the past month, the Loonie has lagged behind its G10 counterparts. But economists at ING expect the Canadian Dollar to outperform next year.

Growth figures should allow 50 bps hike next week

“We continue to see the upside risks for oil prices into the new year, and CAD’s limited exposure to China/Ukraine and superior liquidity are good arguments to expect CAD to outperform other procyclical currencies in 2023, should risk sentiment stabilise.”

“Today, Canada’s third-quarter growth data will be published, and expectations are for a 1.5% annualised read. This should enable the Bank of Canada to hike by 50 bps next week.”