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FX Forecasts

After a Good June for Several Currencies, the Situation Could Quickly Deteriorate

July 10, 2023
Hendrix Vachon
Principal Economist

A further rebound by the US dollar is still likely. Support could come from a favourable interest rate trend or increased economic uncertainty and a loss of risk appetite. We expect the economy to deteriorate in several countries over the summer and fall. The Canadian dollar is expected to end the year around C$1.37/US$ (US$0.73), assuming the Bank of Canada only raises rates once more. We don’t expect much support from commodity prices, although oil could always come as a surprise due to supply constraints. In the longer term, the loonie should benefit from an improving global economic environment and greater demand for commodities.