Canadian dollar seen higher if commodity prices rebound: Reuters poll

THIS WEEK IN THE FOREX MARKETS

Canadian dollar seen higher if commodity prices rebound: Reuters poll

TORONTO (Reuters) - The Canadian dollar is set to gain more than 2% against its U.S. counterpart in a year as an expected recovery in the global economy from the coronavirus crisis improves the outlook for commodity prices, a Reuters poll showed.

The loonie is expected to strengthen 0.6% to 1.32 per U.S. dollar, or 75.76 U.S. cents, in three months from about 1.3280 on Thursday, the poll of more than 40 currency strategists showed.

It is then expected to climb to 1.30 in one year, matching last month’s forecast.

“We expect oil and other commodity prices to rebound, particularly in the second half of 2021,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. “That should pull CAD higher as well.”

Oil (CLc1), one of Canada’s major exports, has slumped about 37% since the start of the year to less than $39 a barrel as global economic activity collapsed due to the coronavirus pandemic and lockdown measures. But a separate Reuters poll this week predicts very little upside for the price of crude in the near term.

Next year could be a different story. The Organization for Economic Cooperation and Development projected this month that the world economy would expand by 5% in 2021 after an expected 4.5% contraction this year. Read more...