Good fundamentals, despite last week’s grim jobs figures, are likely generating some support for the loonie. Economists at ING expect the USD/CAD pair to stabilise around 1.2600.

BoC to deliver six 25bp increases by the end of 2022

“We think that markets are currently weighing the fundamental picture for the loonie, finding it still attractive, especially considering the recent CAD underperformance.”

“We doubt that the Bank of Canada’s tightening plans have been derailed by January’s jobs data, and we forecast six 25bp increases by the end of 2022. This should offer support to the loonie down the road: for now, we expect USD/CAD to stabilise around 1.2600.”