USD/CAD: A further move closer to 1.4000 cannot be ruled out – Wells Fargo

Economists at Wells Fargo expect the Canadian Dollar to underperform through early 2024.

Potential for further Loonie weakness

With inflation gradually heading lower we believe Bank of Canada rate hikes are done, and that rates cuts could begin in Q2-2024, ahead of the Federal Reserve.

As Canadian growth remains subdued and in the absence of further BoC tightening, we also see potential for further Canadian Dollar weakness. 

The USD/CAD exchange rate has already reached our medium-term target of 1.3700, but a further move closer to 1.4000 over the next several months cannot be ruled out.