TORONTO (Reuters) – The Canadian dollar is expected to rally further over the coming year as a global economic recovery takes hold, and the gains could accelerate if investors perceive the Bank of Canada is preparing to reduce monetary stimulus, strategists say.
The median forecast of nearly 40 analysts in a Reuters poll was for the loonie to strengthen 1% to 1.27 per U.S. dollar, or 78.74 U.S. cents, in three months, matching the forecast in January’s poll. It is then expected to gain to 1.25 in one year.
“Global reflation and commodity price support are very likely this year and hence CAD direction is clear – the pace is the only debate,” said Derek Halpenny, head of research, global markets EMEA and international securities, at MUFG Bank.
Canada is a major producer of commodities, including oil, which has climbed about 17% since the start of January. It reached a one-year high on Friday above $56 a barrel as the Organization of the Petroleum Exporting Countries and its allies decided to stick to output cuts.
Economists in a Reuters poll forecast last month that global growth would rise 5.3% this year after shrinking 3.9% in 2020, helped by COVID-19 vaccine breakthroughs and accommodative monetary policies.
The Bank of Canada has indicated it will hold its benchmark interest rate at a record low of 0.25% until 2023, but money markets have been pricing in the chance of an earlier increase.
“I don’t see rates moving higher this year but (BoC) communications could fuel expectations that help provide more support for CAD than we currently assume,” Halpenny said.
Strategists say the central bank could reduce the pace of its quantitative-easing purchases in the coming months. It owns nearly 40% of government bonds outstanding, up from 14% at the beginning of last year.
Analysts at Monex Europe and Monex Canada, including Simon Harvey, expect a “sustained rally” for the loonie, which has strengthened about 13% since last March as the U.S. dollar declined.[EUR/POLL]
Still, there are risks to the outlook, the analysts say in a note, including struggles delivering COVID-19 vaccines and a U.S. effort to ensure federal agencies buy American-produced goods.
Canada will succeed in inoculating its population despite “momentary disruptions” in the supply of vaccines and is working closely with the new U.S. administration to fight the disease, Prime Minister Justin Trudeau told Reuters on Thursday.
Last week, Trudeau said that Canada will seek exemptions to U.S. President Joe Biden’s “Buy American” program. Canada sends about 75% of its exports to the United States.
(For other stories from the February Reuters foreign exchange poll:)
(Reporting by Fergal Smith; polling by Tushar Goenka and Swathi Nair; editing by Larry King)
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
