Currency forecasters are saying the Canadian dollar will strengthen in 2017 as the country’s economy accelerates in the second half of the year and worries over U.S. President-elect Donald Trump’s trade policies fade.
Prognosticators at Warsaw-based foreign-exchange broker Dom Maklerski TMS Brokers say the loonie will nudge an additional 0.75% higher to 75.75 U.S. cents by the end of the year. The projections topped a Bloomberg ranking of Canadian dollar forecasters in the fourth quarter. That would extend the loonie’s 3% gain over last year, which made it the best performer among Group-of-10 peers.
Moreover, the prediction is also in contrast to the median forecast of analysts surveyed by Bloomberg for the currency to weaken to 74.07 cents U.S. by the end of the year.
Dom Maklerski concedes the currency faces some hurdles in the first quarter. The Canadian dollar fell to a 10-month low in December against its rallying U.S. counterpart after the U.S. Federal Reserve raised interest rates for only the second time since the global financial crisis in 2008.
It adds our economy will feel the positive effects of an acceleration of growth worldwide and the risks to trade with the U.S. — the worries over tearing down the North American Free Trade Agreement — will drop.
