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Beyond the near term, on the other hand, we confirm our expectations for a gradual strengthening of the Canadian dollar towards the USD/CAD 1.25-1.20 range on a 12m-24m horizon, in function of both forecasts for an acceleration in growth in the next two years, and of a further increase in oil prices. Based on our estimates, the WTI should level off at around USD 50 per barrel at the end of this year, and rise towards the USD 60-65 range by the end of 2017. The expected strengthening of the CAD against the US dollar may not translate into a rise against the euro, due to a more or less similar forecast strengthening of the EUR/USD.

CAD, Canadian Dollar, BoC Rates, Still Unchanged, News, Inflation, fx trader, forex fig 1

CAD, Canadian Dollar, BoC Rates, Still Unchanged, News, Inflation, fx trader, forex fig 2

CAD, Canadian Dollar, BoC Rates, Still Unchanged, News, Inflation, fx trader, forex fig 3

CAD, Canadian Dollar, BoC Rates, Still Unchanged, News, Inflation, fx trader, forex fig 4

CAD, Canadian Dollar, BoC Rates, Still Unchanged, News, Inflation, fx trader, forex fig 5

CAD, Canadian Dollar, BoC Rates, Still Unchanged, News, Inflation, fx trader, forex fig

 

Source: Thomson Reuters-Datastream

Luca Mezzomo / Chief Economist
Asmara Jamaleh / Economist – Forex Markets
Intesa Sanpaolo Research Department

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