By Fergal Smith<\/p>\n
TORONTO, June 4 (Reuters) – Canada’s dollar will strengthen over the coming year against its U.S. counterpart so long as the domestic economy recovers and progress is made \u200cin the review of a continental trade pact, a Reuters poll showed on Thursday.<\/p>\n
The \u200cmedian forecast of 31 foreign exchange analysts in a May 29 to June 3 poll was for the Canadian dollar to \u200bgain 1.4% to 1.37 per U.S. dollar, or 72.99 U.S. cents, in three months – slightly weaker than the 1.3667 forecast in a survey last month.<\/p>\n
In 12 months, the loonie was expected to be up 3.7% at 1.3400, compared with 1.3433 in the previous forecast.<\/p>\n
Canada had a positive meeting with the U.S. on the \u200creview of the United States-Mexico-Canada Agreement, \u2060the minister responsible for Canada-U.S. trade, Dominic LeBlanc, said in Washington on Tuesday. The trade deal has shielded most of the country’s exports from U.S. tariffs.<\/p>\n
“The \u2060Canadian dollar needs to see progress and eventually resolution of the USMCA talks before it can strengthen durably,” said Benjamin Reitzes, Canadian rates and macro strategist at BMO Capital Markets.<\/p>\n
“Until then, it\u2019s going to be challenging \u200bfor the \u200bloonie as the economy remains under pressure from the \u200buncertainty and as U.S.-Iran headlines whip the \u200cmarket around,” he added. Indeed, the Organisation for Economic Co-operation and Development warned on Wednesday that the entire global economic outlook hinged on how long the conflict in the Middle East lasts.<\/p>\n
Data on Friday showed the economy unexpectedly slipped into a technical recession in the first quarter, reducing expectations for Bank of Canada interest rate hikes this year even as some Federal Reserve policymakers turn more hawkish.<\/p>\n
The Canadian \u200ctwo-year bond yield has fallen about 35 basis points \u200bfurther below its U.S. equivalent in the past month to \u200ba spread of around 125 basis points. \u200bStill, analysts doubt the economic downturn will persist.<\/p>\n
We expect “the Canadian economy will stabilize \u200cin H2 this year and accelerate next year, \u200bled by a stabilization \u200bin the real estate sector, improving investment climate and fiscal policy,” said Mirza Baig, a foreign exchange strategist at Desjardins.<\/p>\n
Prime Minister Mark Carney has said he would prioritize lowering the cost \u200bof living in Canada, tackling a \u200chousing shortage, and building major infrastructure projects to help make the economy less dependent \u200bon the United States.<\/p>\n
(Other stories from the June Reuters foreign exchange poll)<\/p>\n
(Reporting by Fergal \u200bSmith; Polling by Jaiganesh Mahesh; Editing by Hugh Lawson)<\/p>\n","protected":false},"excerpt":{"rendered":"By Fergal Smith TORONTO, June 4 (Reuters) – Canada’s dollar will strengthen over the coming year against its…\n","protected":false},"author":2,"featured_media":74233,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[17,1635,9326],"class_list":["post-74232","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-canada","tag-canadian-dollar","tag-foreign-exchange"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/74232","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/comments?post=74232"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/74232\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/74233"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=74232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=74232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=74232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}