Canadian dollar could drop to 65 cents US in 2017, Macquarie forecasts.
Higher interest rates in the U.S. are a major factor that will drive loonie down, bank says.
Trump's going to elevate the USA.
After a rough 2016, a currency prognosticator at a major investment bank says he expects more pain for the Canadian dollar next year, predicting a low of around 65 cents US in the next 12 months.
David Doyle of Macquarie Capital Markets Canada Ltd. says two major factors are going to conspire to drag the loonie almost 10 cents lower than its current level of around 74 cents US over the next year: interest rates and the price of oil.
Looks like Trump is making America great again.
Higher interest rates in the U.S. are a major reason why Macquarie thinks the loonie will lose about 10 cents versus the U.S. dollar over the next 12 months. (Jonathan Hayward/Canadian Press)
We better pray oil go's back up fast!!!!
"The Bank of Canada, we think, is either going to be on hold or even cut rates," Doyle said in an interview this week. "That divergence pushes the Canadian dollar lower and into that 65-cent level."
Another big factor that will be very familiar to Canadians is the impact of the price of oil. Currently oil is changing hands at around $52 US per barrel. Doyle assumes the price of oil will increase slightly over the next 12 months to about $57 US per barrel.
That not enough to help :roll:
Normally that would drive the loonie higher too, but in this case a modest increase like that won't be enough to offset the impact of interest rates.
"For now the house view is that the oil price is unlikely to go above $60," Doyle said. "If crude oil were to move well above $60 then we'd have to update and revise to incorporate that into our loonie call."
Trump impact
There's an X factor in all this, however. The election of Donald Trump could have benefits and drawbacks from Canada's perspective, and Doyle says it's hard to tell at this point which ones are more likely.
The president-elect's sabre-rattling on geopolitical events could send oil prices sharply higher, and that could move the loonie much higher, Doyle says. On the flip side, it's just as likely that Trump makes good on his vow to tear up NAFTA and possibly slap tariffs on Canadian goods. That would obviously send the loonie plummeting.
"There's a much wider range of outcomes," Doyle says.
"We looked at where the risks are versus where we see things headed," he says. And for the Canadian dollar right now, "the direction is likely lower."
Ooooh look at this :laughing3:
https://www.google.ca/amp/www.cbc.ca/amp/1.3909519
Guess we should look forward to the 65 to the dollar economy.
Higher interest rates in the U.S. are a major factor that will drive loonie down, bank says.
Trump's going to elevate the USA.
After a rough 2016, a currency prognosticator at a major investment bank says he expects more pain for the Canadian dollar next year, predicting a low of around 65 cents US in the next 12 months.
David Doyle of Macquarie Capital Markets Canada Ltd. says two major factors are going to conspire to drag the loonie almost 10 cents lower than its current level of around 74 cents US over the next year: interest rates and the price of oil.
Looks like Trump is making America great again.
Higher interest rates in the U.S. are a major reason why Macquarie thinks the loonie will lose about 10 cents versus the U.S. dollar over the next 12 months. (Jonathan Hayward/Canadian Press)
We better pray oil go's back up fast!!!!
"The Bank of Canada, we think, is either going to be on hold or even cut rates," Doyle said in an interview this week. "That divergence pushes the Canadian dollar lower and into that 65-cent level."
Another big factor that will be very familiar to Canadians is the impact of the price of oil. Currently oil is changing hands at around $52 US per barrel. Doyle assumes the price of oil will increase slightly over the next 12 months to about $57 US per barrel.
That not enough to help :roll:
Normally that would drive the loonie higher too, but in this case a modest increase like that won't be enough to offset the impact of interest rates.
"For now the house view is that the oil price is unlikely to go above $60," Doyle said. "If crude oil were to move well above $60 then we'd have to update and revise to incorporate that into our loonie call."
Trump impact
There's an X factor in all this, however. The election of Donald Trump could have benefits and drawbacks from Canada's perspective, and Doyle says it's hard to tell at this point which ones are more likely.
The president-elect's sabre-rattling on geopolitical events could send oil prices sharply higher, and that could move the loonie much higher, Doyle says. On the flip side, it's just as likely that Trump makes good on his vow to tear up NAFTA and possibly slap tariffs on Canadian goods. That would obviously send the loonie plummeting.
"There's a much wider range of outcomes," Doyle says.
"We looked at where the risks are versus where we see things headed," he says. And for the Canadian dollar right now, "the direction is likely lower."
Ooooh look at this :laughing3:
https://www.google.ca/amp/www.cbc.ca/amp/1.3909519
Guess we should look forward to the 65 to the dollar economy.
. Won't be enough to help, Looking forward to a 65 cent economy. Good thing I planned that trip to Disney this year.
