The
Canadian greenback
is shedding floor, prompting some economists to chop their forecasts for the forex “considerably.”
Desjardins Group had predicted the loonie would hit 74 U.S. cents by the tip of this yr, however has now minimize that forecast by three cents to 71.
“Our year-end USDCAD forecast of 1.35 [74 U.S. cents] now seems a protracted shot,” mentioned Desjardins chief economist Jimmy Jean and international alternate strategist Mirza Shaheryar Baig
in a current report.
“We now have modified our forecasts and now count on the loonie to stay comfortable within the subsequent two quarters earlier than regularly strengthening in direction of the tip of subsequent yr.”
After hitting 74 U.S. cents in June, the Canadian greenback has been on a downward observe not simply towards the U.S. greenback, however different main currencies as nicely.
“This wasn’t only a U.S. greenback story,” mentioned the strategists. Canada’s forex has sunk 6 per cent towards the Mexican peso, 5 per cent towards the euro and three per cent to the renminbi.
The
Financial institution of Canada’s
CEER Index, a weighted common of bilateral alternate charges for the Canadian greenback towards the currencies of main buying and selling companions, is close to a nine-year low, they mentioned.
Desjardins suspects two key drivers are clipping the loonie’s wings. Pension fund hedging flows have abated and the
Canadian economic system
is lagging the US.
Canada’s economic system didn’t develop within the first half of the yr, and Desjardins expects progress within the third quarter at lower than 1 per cent. Companies stay cautious underneath the specter of
U.S. tariffs
and households are underneath pressure as mortgages renew at larger charges. The fast deceleration in inhabitants progress has additionally weighed.
Whereas fiscal stimulus is predicted within the upcoming
federal finances
, its advantages gained’t present up till nicely into 2026, mentioned the strategists.
Down south it’s a really completely different image. Sturdy client demand and enterprise funding drove progress larger within the first half of the yr, particularly in high-tech sectors, and economists are actually “considerably” upgrading their forecasts. The
Federal Reserve Financial institution of Atlanta’s GDPNow
presently places progress for the third quarter at 3.9 per cent.
There are dangers to the U.S. outlook. Commerce tensions with China may escalate, the federal government shutdown may drag on to the purpose that it damages the economic system and high-flying tech shares may endure a correction.
“The U.S. greenback has stabilized for now however stays susceptible ought to any of those dangers materialize,” mentioned the strategists.
Nevertheless, one other of the loonie’s driver, pension fund hedging, has taken a again seat because the summer time. Desjardins mentioned Canadian pension funds considerably raised their foreign exchange hedge ratios within the second quarter, boosting the Canadian greenback, however now they look like sitting on the sidelines.
With that wave over, price differentials — the hole between the charges of the Financial institution of Canada and U.S.
Federal Reserve
— is reasserting its sway over the Canadian greenback.
Each Canada’s central financial institution and the Fed determine on rates of interest tomorrow, and each are anticipated to chop, placing their charges at 2.25 per cent and three.75 to 4 per cent, respectively.
However Desjardins thinks that hole may widen additional, placing extra strain on the loonie, if the Financial institution of Canada cuts its price to 2 per cent sooner than markets count on, as they predict.
The Canadian greenback was buying and selling at 71.40 U.S. cents this morning.
Enroll right here to get Posthaste delivered straight to your inbox.
Development prices in Canada have shot up 67.7 per cent because the finish of 2019, the quickest tempo amongst superior nations.
All main economies suffered a spike in constructing prices amid the worldwide provide shock and excessive commodity costs introduced on by the COVID-19 pandemic, however in Canada there have been regional components at work as nicely, mentioned Desjardins Group economists. A scarcity of expert labour, regulatory pink tape and intense actual property hypothesis, particularly in Vancouver and Toronto, all helped push up prices.
Canada, nonetheless, just isn’t the costliest place to construct properties. That goes to New York, which tops the World Inhabitants Overview’s listing at US$5,723 per sq. metre. Vancouver ranks fifteenth at a value of US$3,063 per sq. metre.
- In the present day’s Knowledge: United States Convention Board client confidence
- Earnings: First Quantum Minerals Ltd., Centerra Gold Inc., New Gold Inc., Visa Inc, PayPal Holdings Inc., Mondelez Worldwide Inc., Digital Arts Inc.
- Financial institution of Canada anticipated to chop rate of interest this week as forecasters see extra weak point to return for economic system
- Canada is about to announce its new immigration targets, however what’s the correct quantity?
- The way to make a sleek exit from sure exposures within the inventory market
The market social gathering is in full swing, however cracks are forming, writes investing professional Martin Pelletier. He explains how buyers could make a sleek exit from sure exposures within the inventory marketplace for when the music stops.
Learn on
McLister on mortgages
Need to study extra about mortgages? Mortgage strategist Robert McLister’s
Monetary Publish column
may help navigate the complicated sector, from the newest traits to financing alternatives you gained’t need to miss. Plus test his
mortgage price web page
for Canada’s lowest nationwide mortgage charges, up to date each day.
Monetary Publish on YouTube
Go to the Monetary Publish’s
YouTube channel
for interviews with Canada’s main specialists in enterprise, economics, housing, the power sector and extra.
In the present day’s Posthaste was written by Pamela Heaven with extra reporting from Monetary Publish workers, The Canadian Press and Bloomberg.
Have a narrative thought, pitch, embargoed report, or a suggestion for this article? Electronic mail us at
.
Bookmark our web site and assist our journalism: Don’t miss the enterprise information you’ll want to know — add financialpost.com to your bookmarks and join our newsletters right here
The
Canadian greenback
is shedding floor, prompting some economists to chop their forecasts for the forex “considerably.”
Desjardins Group had predicted the loonie would hit 74 U.S. cents by the tip of this yr, however has now minimize that forecast by three cents to 71.
“Our year-end USDCAD forecast of 1.35 [74 U.S. cents] now seems a protracted shot,” mentioned Desjardins chief economist Jimmy Jean and international alternate strategist Mirza Shaheryar Baig
in a current report.
“We now have modified our forecasts and now count on the loonie to stay comfortable within the subsequent two quarters earlier than regularly strengthening in direction of the tip of subsequent yr.”
After hitting 74 U.S. cents in June, the Canadian greenback has been on a downward observe not simply towards the U.S. greenback, however different main currencies as nicely.
“This wasn’t only a U.S. greenback story,” mentioned the strategists. Canada’s forex has sunk 6 per cent towards the Mexican peso, 5 per cent towards the euro and three per cent to the renminbi.
The
Financial institution of Canada’s
CEER Index, a weighted common of bilateral alternate charges for the Canadian greenback towards the currencies of main buying and selling companions, is close to a nine-year low, they mentioned.
Desjardins suspects two key drivers are clipping the loonie’s wings. Pension fund hedging flows have abated and the
Canadian economic system
is lagging the US.
Canada’s economic system didn’t develop within the first half of the yr, and Desjardins expects progress within the third quarter at lower than 1 per cent. Companies stay cautious underneath the specter of
U.S. tariffs
and households are underneath pressure as mortgages renew at larger charges. The fast deceleration in inhabitants progress has additionally weighed.
Whereas fiscal stimulus is predicted within the upcoming
federal finances
, its advantages gained’t present up till nicely into 2026, mentioned the strategists.
Down south it’s a really completely different image. Sturdy client demand and enterprise funding drove progress larger within the first half of the yr, particularly in high-tech sectors, and economists are actually “considerably” upgrading their forecasts. The
Federal Reserve Financial institution of Atlanta’s GDPNow
presently places progress for the third quarter at 3.9 per cent.
There are dangers to the U.S. outlook. Commerce tensions with China may escalate, the federal government shutdown may drag on to the purpose that it damages the economic system and high-flying tech shares may endure a correction.
“The U.S. greenback has stabilized for now however stays susceptible ought to any of those dangers materialize,” mentioned the strategists.
Nevertheless, one other of the loonie’s driver, pension fund hedging, has taken a again seat because the summer time. Desjardins mentioned Canadian pension funds considerably raised their foreign exchange hedge ratios within the second quarter, boosting the Canadian greenback, however now they look like sitting on the sidelines.
With that wave over, price differentials — the hole between the charges of the Financial institution of Canada and U.S.
Federal Reserve
— is reasserting its sway over the Canadian greenback.
Each Canada’s central financial institution and the Fed determine on rates of interest tomorrow, and each are anticipated to chop, placing their charges at 2.25 per cent and three.75 to 4 per cent, respectively.
However Desjardins thinks that hole may widen additional, placing extra strain on the loonie, if the Financial institution of Canada cuts its price to 2 per cent sooner than markets count on, as they predict.
The Canadian greenback was buying and selling at 71.40 U.S. cents this morning.
Enroll right here to get Posthaste delivered straight to your inbox.
Development prices in Canada have shot up 67.7 per cent because the finish of 2019, the quickest tempo amongst superior nations.
All main economies suffered a spike in constructing prices amid the worldwide provide shock and excessive commodity costs introduced on by the COVID-19 pandemic, however in Canada there have been regional components at work as nicely, mentioned Desjardins Group economists. A scarcity of expert labour, regulatory pink tape and intense actual property hypothesis, particularly in Vancouver and Toronto, all helped push up prices.
Canada, nonetheless, just isn’t the costliest place to construct properties. That goes to New York, which tops the World Inhabitants Overview’s listing at US$5,723 per sq. metre. Vancouver ranks fifteenth at a value of US$3,063 per sq. metre.
- In the present day’s Knowledge: United States Convention Board client confidence
- Earnings: First Quantum Minerals Ltd., Centerra Gold Inc., New Gold Inc., Visa Inc, PayPal Holdings Inc., Mondelez Worldwide Inc., Digital Arts Inc.
- Financial institution of Canada anticipated to chop rate of interest this week as forecasters see extra weak point to return for economic system
- Canada is about to announce its new immigration targets, however what’s the correct quantity?
- The way to make a sleek exit from sure exposures within the inventory market
The market social gathering is in full swing, however cracks are forming, writes investing professional Martin Pelletier. He explains how buyers could make a sleek exit from sure exposures within the inventory marketplace for when the music stops.
Learn on
McLister on mortgages
Need to study extra about mortgages? Mortgage strategist Robert McLister’s
Monetary Publish column
may help navigate the complicated sector, from the newest traits to financing alternatives you gained’t need to miss. Plus test his
mortgage price web page
for Canada’s lowest nationwide mortgage charges, up to date each day.
Monetary Publish on YouTube
Go to the Monetary Publish’s
YouTube channel
for interviews with Canada’s main specialists in enterprise, economics, housing, the power sector and extra.
In the present day’s Posthaste was written by Pamela Heaven with extra reporting from Monetary Publish workers, The Canadian Press and Bloomberg.
Have a narrative thought, pitch, embargoed report, or a suggestion for this article? Electronic mail us at
.
Bookmark our web site and assist our journalism: Don’t miss the enterprise information you’ll want to know — add financialpost.com to your bookmarks and join our newsletters right here
The
Canadian greenback
is shedding floor, prompting some economists to chop their forecasts for the forex “considerably.”
Desjardins Group had predicted the loonie would hit 74 U.S. cents by the tip of this yr, however has now minimize that forecast by three cents to 71.
“Our year-end USDCAD forecast of 1.35 [74 U.S. cents] now seems a protracted shot,” mentioned Desjardins chief economist Jimmy Jean and international alternate strategist Mirza Shaheryar Baig
in a current report.
“We now have modified our forecasts and now count on the loonie to stay comfortable within the subsequent two quarters earlier than regularly strengthening in direction of the tip of subsequent yr.”
After hitting 74 U.S. cents in June, the Canadian greenback has been on a downward observe not simply towards the U.S. greenback, however different main currencies as nicely.
“This wasn’t only a U.S. greenback story,” mentioned the strategists. Canada’s forex has sunk 6 per cent towards the Mexican peso, 5 per cent towards the euro and three per cent to the renminbi.
The
Financial institution of Canada’s
CEER Index, a weighted common of bilateral alternate charges for the Canadian greenback towards the currencies of main buying and selling companions, is close to a nine-year low, they mentioned.
Desjardins suspects two key drivers are clipping the loonie’s wings. Pension fund hedging flows have abated and the
Canadian economic system
is lagging the US.
Canada’s economic system didn’t develop within the first half of the yr, and Desjardins expects progress within the third quarter at lower than 1 per cent. Companies stay cautious underneath the specter of
U.S. tariffs
and households are underneath pressure as mortgages renew at larger charges. The fast deceleration in inhabitants progress has additionally weighed.
Whereas fiscal stimulus is predicted within the upcoming
federal finances
, its advantages gained’t present up till nicely into 2026, mentioned the strategists.
Down south it’s a really completely different image. Sturdy client demand and enterprise funding drove progress larger within the first half of the yr, particularly in high-tech sectors, and economists are actually “considerably” upgrading their forecasts. The
Federal Reserve Financial institution of Atlanta’s GDPNow
presently places progress for the third quarter at 3.9 per cent.
There are dangers to the U.S. outlook. Commerce tensions with China may escalate, the federal government shutdown may drag on to the purpose that it damages the economic system and high-flying tech shares may endure a correction.
“The U.S. greenback has stabilized for now however stays susceptible ought to any of those dangers materialize,” mentioned the strategists.
Nevertheless, one other of the loonie’s driver, pension fund hedging, has taken a again seat because the summer time. Desjardins mentioned Canadian pension funds considerably raised their foreign exchange hedge ratios within the second quarter, boosting the Canadian greenback, however now they look like sitting on the sidelines.
With that wave over, price differentials — the hole between the charges of the Financial institution of Canada and U.S.
Federal Reserve
— is reasserting its sway over the Canadian greenback.
Each Canada’s central financial institution and the Fed determine on rates of interest tomorrow, and each are anticipated to chop, placing their charges at 2.25 per cent and three.75 to 4 per cent, respectively.
However Desjardins thinks that hole may widen additional, placing extra strain on the loonie, if the Financial institution of Canada cuts its price to 2 per cent sooner than markets count on, as they predict.
The Canadian greenback was buying and selling at 71.40 U.S. cents this morning.
Enroll right here to get Posthaste delivered straight to your inbox.
Development prices in Canada have shot up 67.7 per cent because the finish of 2019, the quickest tempo amongst superior nations.
All main economies suffered a spike in constructing prices amid the worldwide provide shock and excessive commodity costs introduced on by the COVID-19 pandemic, however in Canada there have been regional components at work as nicely, mentioned Desjardins Group economists. A scarcity of expert labour, regulatory pink tape and intense actual property hypothesis, particularly in Vancouver and Toronto, all helped push up prices.
Canada, nonetheless, just isn’t the costliest place to construct properties. That goes to New York, which tops the World Inhabitants Overview’s listing at US$5,723 per sq. metre. Vancouver ranks fifteenth at a value of US$3,063 per sq. metre.
- In the present day’s Knowledge: United States Convention Board client confidence
- Earnings: First Quantum Minerals Ltd., Centerra Gold Inc., New Gold Inc., Visa Inc, PayPal Holdings Inc., Mondelez Worldwide Inc., Digital Arts Inc.
- Financial institution of Canada anticipated to chop rate of interest this week as forecasters see extra weak point to return for economic system
- Canada is about to announce its new immigration targets, however what’s the correct quantity?
- The way to make a sleek exit from sure exposures within the inventory market
The market social gathering is in full swing, however cracks are forming, writes investing professional Martin Pelletier. He explains how buyers could make a sleek exit from sure exposures within the inventory marketplace for when the music stops.
Learn on
McLister on mortgages
Need to study extra about mortgages? Mortgage strategist Robert McLister’s
Monetary Publish column
may help navigate the complicated sector, from the newest traits to financing alternatives you gained’t need to miss. Plus test his
mortgage price web page
for Canada’s lowest nationwide mortgage charges, up to date each day.
Monetary Publish on YouTube
Go to the Monetary Publish’s
YouTube channel
for interviews with Canada’s main specialists in enterprise, economics, housing, the power sector and extra.
In the present day’s Posthaste was written by Pamela Heaven with extra reporting from Monetary Publish workers, The Canadian Press and Bloomberg.
Have a narrative thought, pitch, embargoed report, or a suggestion for this article? Electronic mail us at
.
Bookmark our web site and assist our journalism: Don’t miss the enterprise information you’ll want to know — add financialpost.com to your bookmarks and join our newsletters right here
The
Canadian greenback
is shedding floor, prompting some economists to chop their forecasts for the forex “considerably.”
Desjardins Group had predicted the loonie would hit 74 U.S. cents by the tip of this yr, however has now minimize that forecast by three cents to 71.
“Our year-end USDCAD forecast of 1.35 [74 U.S. cents] now seems a protracted shot,” mentioned Desjardins chief economist Jimmy Jean and international alternate strategist Mirza Shaheryar Baig
in a current report.
“We now have modified our forecasts and now count on the loonie to stay comfortable within the subsequent two quarters earlier than regularly strengthening in direction of the tip of subsequent yr.”
After hitting 74 U.S. cents in June, the Canadian greenback has been on a downward observe not simply towards the U.S. greenback, however different main currencies as nicely.
“This wasn’t only a U.S. greenback story,” mentioned the strategists. Canada’s forex has sunk 6 per cent towards the Mexican peso, 5 per cent towards the euro and three per cent to the renminbi.
The
Financial institution of Canada’s
CEER Index, a weighted common of bilateral alternate charges for the Canadian greenback towards the currencies of main buying and selling companions, is close to a nine-year low, they mentioned.
Desjardins suspects two key drivers are clipping the loonie’s wings. Pension fund hedging flows have abated and the
Canadian economic system
is lagging the US.
Canada’s economic system didn’t develop within the first half of the yr, and Desjardins expects progress within the third quarter at lower than 1 per cent. Companies stay cautious underneath the specter of
U.S. tariffs
and households are underneath pressure as mortgages renew at larger charges. The fast deceleration in inhabitants progress has additionally weighed.
Whereas fiscal stimulus is predicted within the upcoming
federal finances
, its advantages gained’t present up till nicely into 2026, mentioned the strategists.
Down south it’s a really completely different image. Sturdy client demand and enterprise funding drove progress larger within the first half of the yr, particularly in high-tech sectors, and economists are actually “considerably” upgrading their forecasts. The
Federal Reserve Financial institution of Atlanta’s GDPNow
presently places progress for the third quarter at 3.9 per cent.
There are dangers to the U.S. outlook. Commerce tensions with China may escalate, the federal government shutdown may drag on to the purpose that it damages the economic system and high-flying tech shares may endure a correction.
“The U.S. greenback has stabilized for now however stays susceptible ought to any of those dangers materialize,” mentioned the strategists.
Nevertheless, one other of the loonie’s driver, pension fund hedging, has taken a again seat because the summer time. Desjardins mentioned Canadian pension funds considerably raised their foreign exchange hedge ratios within the second quarter, boosting the Canadian greenback, however now they look like sitting on the sidelines.
With that wave over, price differentials — the hole between the charges of the Financial institution of Canada and U.S.
Federal Reserve
— is reasserting its sway over the Canadian greenback.
Each Canada’s central financial institution and the Fed determine on rates of interest tomorrow, and each are anticipated to chop, placing their charges at 2.25 per cent and three.75 to 4 per cent, respectively.
However Desjardins thinks that hole may widen additional, placing extra strain on the loonie, if the Financial institution of Canada cuts its price to 2 per cent sooner than markets count on, as they predict.
The Canadian greenback was buying and selling at 71.40 U.S. cents this morning.
Enroll right here to get Posthaste delivered straight to your inbox.
Development prices in Canada have shot up 67.7 per cent because the finish of 2019, the quickest tempo amongst superior nations.
All main economies suffered a spike in constructing prices amid the worldwide provide shock and excessive commodity costs introduced on by the COVID-19 pandemic, however in Canada there have been regional components at work as nicely, mentioned Desjardins Group economists. A scarcity of expert labour, regulatory pink tape and intense actual property hypothesis, particularly in Vancouver and Toronto, all helped push up prices.
Canada, nonetheless, just isn’t the costliest place to construct properties. That goes to New York, which tops the World Inhabitants Overview’s listing at US$5,723 per sq. metre. Vancouver ranks fifteenth at a value of US$3,063 per sq. metre.
- In the present day’s Knowledge: United States Convention Board client confidence
- Earnings: First Quantum Minerals Ltd., Centerra Gold Inc., New Gold Inc., Visa Inc, PayPal Holdings Inc., Mondelez Worldwide Inc., Digital Arts Inc.
- Financial institution of Canada anticipated to chop rate of interest this week as forecasters see extra weak point to return for economic system
- Canada is about to announce its new immigration targets, however what’s the correct quantity?
- The way to make a sleek exit from sure exposures within the inventory market
The market social gathering is in full swing, however cracks are forming, writes investing professional Martin Pelletier. He explains how buyers could make a sleek exit from sure exposures within the inventory marketplace for when the music stops.
Learn on
McLister on mortgages
Need to study extra about mortgages? Mortgage strategist Robert McLister’s
Monetary Publish column
may help navigate the complicated sector, from the newest traits to financing alternatives you gained’t need to miss. Plus test his
mortgage price web page
for Canada’s lowest nationwide mortgage charges, up to date each day.
Monetary Publish on YouTube
Go to the Monetary Publish’s
YouTube channel
for interviews with Canada’s main specialists in enterprise, economics, housing, the power sector and extra.
In the present day’s Posthaste was written by Pamela Heaven with extra reporting from Monetary Publish workers, The Canadian Press and Bloomberg.
Have a narrative thought, pitch, embargoed report, or a suggestion for this article? Electronic mail us at
.
Bookmark our web site and assist our journalism: Don’t miss the enterprise information you’ll want to know — add financialpost.com to your bookmarks and join our newsletters right here
