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POLL-Canadian dollar rises in a year if economy avoids hard landing

Fergal Smith

Toronto, April 5 (Reuters)The Canadian dollar is set to rise again over the next year after a recent period of consolidation as the expected slowdown in economic activity stalls ahead of a hard landing for the economy, according to a Reuters poll. is.

Canadian currency since early March CAD= It gained about 3% against the US dollar on concerns that the global banking crisis could ease the credit crunch and strengthen the US dollar. .DXY It has lost ground against a basket of major currencies.

The currency gained further momentum this week as the price of oil, one of Canada’s major exports, surged. On Tuesday, it hit its strongest intraday level in almost seven weeks, nearing 1.34, or 74.63 cents on the dollar.

The median forecast of nearly 50 currency analysts was for the Looney to weaken to 1.35 per US dollar within three months, compared to 1.34 expected in last month’s forecasts. But then in a year he is expected to recover to 1.30, which he is up 3.5%.

“Basically, it reflects a moderation in[economic]growth … a soft landing rather than a hard one, and CAD thrives in that environment,” said Maizen Issa, senior FX strategist at TD Securities. ‘ said. .

“But if the US (outlook) becomes particularly volatile and lending conditions tighten significantly, there could be a bit more trouble globally.”

of bank of canada The Fed is ready to help if the banking system faces severe strain, but not enough to worry about the health of the financial system, Deputy Governor Toni Gravel said last Wednesday.

Next Wednesday, the central bank will make an interest rate decision and update its economic forecasts.money market and economist After the BoC suspended its hiking campaign last month, the benchmark rate is expected to remain at 4.50%, a 15-year high.

Other central banks, such as the US Federal Reserve, may also shut down soon.

“I think it’s an environment where the (USD) loses a little bit of its edge,” Issa said. “We will make some concessions on the interest rate differential,” he said.

The gap between Canadian 2-year yields and US counterparts traded 27 basis points on Tuesday, favoring US Treasuries, the smallest gap since early January.

(Reporting by Fergal Smith, Poll by Indradip Ghosh and Prerana Bhat, Editing by Sharon Singleton)

((fergal.smith@thomsonreuters.com+1 647 480 7446;))

The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.

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Fergal Smith

Toronto, April 5 (Reuters) – The Canadian dollar is set to rise again over the next year after a recent period of consolidation as the expected slowdown in economic activity stalls ahead of a hard landing for the economy, according to a Reuters poll. is.
Canadian currency since early March CAD= It gained about 3% against the US dollar on concerns that the global banking crisis could ease the credit crunch and strengthen the US dollar. .DXY It has lost ground against a basket of major currencies.
The currency gained further momentum this week as the price of oil, one of Canada’s major exports, surged. On Tuesday, it hit its strongest intraday level in almost seven weeks, nearing 1.34, or 74.63 cents on the dollar.
The median forecast of nearly 50 currency analysts was for the Looney to weaken to 1.35 per US dollar within three months, compared to 1.34 expected in last month’s forecasts. But then in a year he is expected to recover to 1.30, which he is up 3.5%.

“Basically, it reflects a moderation in[economic]growth … a soft landing rather than a hard one, and CAD thrives in that environment,” said Maizen Issa, senior FX strategist at TD Securities. ‘ said. .
“But if the US (outlook) becomes particularly volatile and lending conditions tighten significantly, there could be a bit more trouble globally.”
of bank of canada The Fed is ready to help if the banking system faces severe strain, but not enough to worry about the health of the financial system, Deputy Governor Toni Gravel said last Wednesday.
Next Wednesday, the central bank will make an interest rate decision and update its economic forecasts.money market and economist After the BoC suspended its hiking campaign last month, the benchmark rate is expected to remain at 4.50%, a 15-year high.
Other central banks, such as the US Federal Reserve, may also shut down soon.
“I think it’s an environment where the (USD) loses a little bit of its edge,” Issa said. “We will make some concessions on the interest rate differential,” he said.

The gap between Canadian 2-year yields and US counterparts traded 27 basis points on Tuesday, favoring US Treasuries, the smallest gap since early January.
(Reporting by Fergal Smith, Poll by Indradip Ghosh and Prerana Bhat, Editing by Sharon Singleton)
((fergal.smith@thomsonreuters.com+1 647 480 7446;))

The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.

https://www.nasdaq.com/articles/poll-canadian-dollar-seen-up-in-one-year-if-economy-avoids-hard-landing POLL-Canadian dollar rises in a year if economy avoids hard landing

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