The Canadian Dollar has held up well in recent weeks. Economists at the National Bank of Canada discuss USD/CAD outlook.
We do not expect the tightening of interest rate and Oil price differentials to continue. We must also prepare for a decline in commodity prices, which will have a negative impact on Canada's terms of trade, corporate profitability and the hiring cycle.
In light of the recent slowdown in global manufacturing momentum, we expect USD/CAD to return to the upper end of the 1.33-1.38 range over the coming quarters.