The coming year is unlikely to bring any relief to the weakening Canadian dollar as the Bank of Canada’s neutral stance prompted analysts in a Reuters poll to renew their pessimistic forecasts for the currency.
A number of factors are working against the loonie, not least of which is the growing view that the domestic central bank could be comfortable sitting on the sidelines even as the Federal Reserve starts to raise U.S. interest rates next year.
Investor enthusiasm for the greenback has also hurt the loonie in recent months and that is expected to continue to be a major driver of the currency pair as the U.S. economic recovery picks up steam.
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