Bank of Montreal says the CAD is going to 75 US cents (that's 1.3333 odd for USD/CAD) into the Canadian Fall
Due to three factors:
- a sustained fall in oil and other commodities that Canada exports
- Rise of the U.S. dollar as its economy recovers
- Bank of Canada polices such as interest rate cuts
"Likely to be still more bad short-term news on domestic GDP growth, possible Fed tightening in September, as well as the potential for some volatility amid an uncertain federal election on Oct. 19. These factors are projected to drive the currency to around 75 cents (or lower) in the fall."
Expects oil prices to firm later in the year ... should help "put a floor" under the CAD
Then ...
"expect the C$ to average better than 78 cents for all of next year (actually down a bit from this year's average of 78.6 cents) and forecast it to average close to 80 cents over the medium term - roughly 15% below the median of the past 10 years."
Comments from Douglas Porter, chief economist for the Bank of Montreal. Comments reported in the Canada press.
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(ps. In USD/CAD terms:
75 cents is around 1.3333
78 is around 1.2820)