Choose your settings
Choose your language
FX Forecasts

The US Dollar Joins the Fun, Rising on Strong Economic Data and Higher Interest Rates

February 16, 2023
Hendrix Vachon
Principal Economist

  • Bond yields have been on the rise recently on blockbuster jobs data and other good economic news, sending the greenback higher.
  • We continue to keep a close eye on economic conditions. We aren’t seeing many signs of a recession yet, but the delayed effects of interest rate hikes should become more apparent by spring. We expect market risk appetite to fall, favouring the US dollar. Weaker economic conditions and lower risk appetite should be a drag on the loonie. The Canadian dollar could drop to about US$0.72 by summer before bouncing back in late 2023 and 2024. Our forecast also sees commodity prices falling over the next few quarters.