Economists at the National Bank of Canada still see CAD as slightly weaker through March as Q2 taping by the Bank of Canada bounced back in Q2 and strengthened commodity prices. The USD / CAD target for year-end 2021 remains at 1.20.
“CAD weakness is temporarily possible. The recent shutdown given by the government and the short-term suspension of vaccine availability may depress GDP in the coming months. However, it is important to note that Canada’s economy is not that of others. Not stronger than it is. Affected by the epidemic and that programs designed to encourage people to stay in the workplace have worked well so far. “
“We think it’s difficult to justify the current rate of quantitative easing the bank is taking. BoC’s QE program is much more aggressive relative to GDP than the Federal Reserve. Concerns about financial stability will push the QE program backward . ” For the coming months (April or May), of course, the global economy continues to improve. Such a move would provide some support for CAD appreciation. “