Strategist: Canadian dollar falls to four-year low, may further decline
The USD/CAD has fallen to its lowest level in over four years, and a market strategist suggests that there may be further declines.
Karl Schamotta, Chief Market Strategist of Corpay, stated on Wednesday that the biggest factor driving the Canadian dollar's decline is whether the Bank of Canada may cut interest rates more than the Federal Reserve.
Schamotta said, "The US economy is currently at a high-pressure level, and fiscal stimulus measures are still pouring in. The economy is running very, very hot, which to some extent offsets the prospect of the Federal Reserve relaxing monetary policy
He said that Canada's economic performance is not as good as that of the United States because the increase in consumer debt has suppressed business investment. He predicts that the Canadian dollar may fall another 2% to 3% before the end of this year.
But he said that the outlook for 2025 may be different.
He said, "I don't rule out the possibility that the Canadian dollar will briefly decline before the end of the year and then rebound after Trump takes office next year." He pointed out that historically, when the US economy grows, the Canadian dollar has performed well.
He expects the Canadian dollar to rebound to around 74 cents per Canadian dollar at some point next year (the US dollar is expected to fall to around 1.3513 against the Canadian dollar).
At present, it may go lower, but I believe it may eventually rebound
Daily chart of USD/CAD exchange rate
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