Reuters Poll Suggests Trading Price Of CAD May Surge In 2023February 12, 2023
It is predicted that the trading price of the Canadian dollar (CAD) may surge. Analysts are predicting that the price of the dollar may surge in the later part of 2023.
What is backing up the CAD?
The reason behind the strong and promising predictions about the trading price of the CAD is the global economic outlook.
The particular outlook is reportedly supporting all the currencies that are mainly connected with commodities. As the Canadian dollar is among these currencies, then it means that the trading price of the CAD may surge.
As the month passes by in the year 2023, things would become more and more favorable for the global economy in terms of commodities.
Possible Interest Rate Cuts in 2024
According to the economists, the situation may remain the same for the commodity-linked currencies in the year 2024 as well.
This is because the central banks may resort to cutting down on the interest rates in the respective year. Reuters carried out a poll and released the result on Wednesday.
The poll results are favoring the sentiments of the investors as well as the analysts. They are suggesting that the interest rates would be cut in the year 2024 and that would bring the commodity-linked currencies to the very front.
Prediction for the Canadian Dollar
The price prediction for the Canadian dollar shows that the value of the currency would change a bit against the US dollar.
The predictions have come in for the next three months and they would see the price of the CAD go up to 1.34 per US dollar. More predictions suggest that the value of the CAD may go down to 74.63 US cents.
The predictions coming in for the trading price of CAD in the next three months is stronger than the trading price of CAD against the greenback in January.
The forecast that the analysts had set for the month of January was 1.35, which was lower than the prediction set for the latter months.
The forecast report shows that the analysts are confident that the value of the Canadian dollar will rise in the future.
More Predictions for the CAD
The poll forecast suggests that the value of the CAD may surge to an even higher level against the trading price of the dollar.
According to the poll, the Canadian dollar’s value may surge to a high of 1.30 as the year ends. This means that the trading price of the CAD would have surged more than 3% against the dollar.
China is the Positive Factor
According to the analysts, the Canadian dollar’s trading price is going to surge backed by the fundamental drivers.
The major fundamental driver of the Canadian dollar is the Chinese economy. China’s economy has been down for a while due to COVID-19 exposure.
However, the country is eager to make a comeback in the global economy as the biggest competitor of other major countries.
It has a long-running battle with the United States and to ensure it wins the fight, China has reopened its business sectors.
The country has also lifted most of the stricter COVID measures and is ready to carry out imports and exports on a larger scale.
It wants to achieve the same levels it had prior to the pandemic and so far, things are turning out to be quite promising for the country.
As the largest country in the world in terms of population is coming back alive, the demand is going to rise tremendously. With the demand rising, the value of the commodity-linked currencies would surge significantly.
China is known to import a lot of commodities from Canada so the exports for the country would rise on a large scale. Therefore, the value of the loonie would eventually surge, making it very attractive.