Stronger loonie, but for how long?

The recent strength of the Canadian dollar has surprised most analysts, but questions remain about how long it will last.

At just over 93 cents U-S, the dollar is at least three cents higher than most forecasts had predicted it would be.

R-B-C Dominion analyst Mark Chandler says a weak American currency is the main factor for the loonie's relative strength.

However, he says it's also getting a boost from the Bank of Canada's recent suggestion that short-term interest rates are as low as they're going to go.

B-M-O Capital Markets economist Sal Guatieri says Canada has had one of the strongest currencies since the spring, but he's still expecting the dollar to drop to about 87 cents U-S by next year.

It's a view shared by many other economists in their forecasts for 2014.

 

Photo credit: www.ctvnews.ca

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  1. heng posted on 07/20/2014 01:25 AM
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