- USD/CAD: Drop unlikely to continue – MUFG
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USD/CAD: Drop unlikely to continue – MUFG
The Canadian Dollar was the second best performing G10 currency in June. Economists at MUFG Bank analyze USD/CAD outlook.
US recessionary conditions tend to result in CAD weakness
We believe CAD performance reflects the ongoing resilience of equity markets but suspect that we could soon see a correction to the downside which will increasingly weigh on CAD. History of CAD movement also indicates US recessionary conditions tend to result in CAD weakness.
The strong inter-linkage for the Canadian economy means expectations of weaker growth in Canada will intensify, helping drag CAD lower.
Given the scale of drop in USD/CAD of late, we have altered our USD/CAD forecast profile to show a clearer path higher given our view of the limits of CAD strength from current levels.
USD/CAD – Q3 2023 1.31 Q4 2023 1.32 Q1 2024 1.34 Q2 2024 1.35
Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer