Less Canadian dollar upside seen as U.S. election nears

==========

The Canadian dollar is expected to strengthen less than previously thought over the next year due to sticky inflation potentially delaying Federal Reserve interest rate cuts and uncertainty surrounding the U.S. presidential election, according to a Reuters poll. The median forecast of over 40 foreign exchange analysts predicts that the Canadian dollar will strengthen 0.9% in the next three months to 1.34 per U.S. dollar. However, the currency is expected to advance to 1.31 in a year, falling short of the previous forecast of 1.30. The potential for stronger U.S. inflation and a stronger U.S. dollar, as well as trade measures enacted by former President Donald Trump if re-elected, are cited as factors contributing to the less optimistic outlook for the Canadian dollar. Canada's economy, heavily reliant on trade, particularly with the U.S., is vulnerable to changes in trade policies. The Bank of Canada is expected to maintain its benchmark interest rate at 5% at its next policy decision, but begin a rate-cutting campaign in June or July. Canadian household debt is high, standing at over 180% of disposable income, driven by participation in an undersupplied housing market.

#CanadianDollar #UsElection #Inflation #FederalReserve #Trade #BankOfCanada

https://ca.news.yahoo.com/less-canadian-dollar-upside-seen-110221517.html