The Canadian dollar, which has taken even more of a beating since the election of Donald Trump and the resurgence in the U.S. dollar, is now forecast to fall to 70 cents early in the new year.
The prediction comes not just by one U.S. bank, but also by a major Canadian player.
JP Morgan Chase, in a report titled ‘Uh-Oh Canada,’ forecasts the 70 cent dollar by mid-2017 and then not rising much more than 71 cents throughout the rest of the year. Scotiabank, a Canadian major player in currencies, is now forecasting at 71 cent dollar by mid-year.
The report states that the economic news coming from Canada is tepid at best, and with government policies putting a lid on further housing market growth paired with low oil prices, the coming bump in U.S. rates as early as next month, and certainly into next year, will keep the pressure on the loonie.
Most of the sentiment of a lower dollar rests on the coming policies of the new Trump Administration and uncertainty that brings to fiscal, monetary and trade policy, all three that will weigh on the Canadian dollar.
On November 8, the Canadian dollar was trading at 75 1/4 cents U.S., this morning we have once again broken under 74 cents in early trade.