BMO Chief Economist Predicts Canadian Dollar to Stay Close to Parity Through
2013, but Fall to 90 Cents U.S. in Five Years
- In the short term, slightly softer Canadian dollar to stay close to
parity as improved U.S. momentum spreads north
- Now is the time for Canadian businesses to leverage current
strength of the loonie
TORONTO, ONTARIO -- (Marketwired) -- 04/18/13 -- BMO Chief Economist
Doug Porter is predicting that, while the weakened loonie should stay
close to parity for most of this year, the next five years will see
the Canadian dollar soften to 90 cents U.S.
"The Canadian dollar is hovering at 97.5 cents U.S., but has dropped
over five per cent in the past six months," said Mr. Porter. "There
are a number of factors at play with the loonie's slide, ranging from
generalized U.S. dollar firming, to softer commodity prices, to a
widening trade gap, to a less hawkish Bank of Canada."
Mr. Porter noted that in spite of its recent sluggish performance,
the loonie's prospects remain generally positive for 2014, as Canada
remains attractive internationally and the Bank of Canada is expected
to tighten policy ahead of the Federal Reserve.
Steve Murphy, Head of Commercial Banking, BMO Bank of Montreal, noted
that now is the time for businesses to take advantage of the dollar's
"Given its current strength, and the possibility of it weakening over
the medium term, now is the time for businesses to leverage the
strength of the loonie," said Mr. Murphy. "For those businesses
looking to upgrade their processes, technology, and equipment to
boost their productivity, the high value of the Canadian dollar can
provide them with additional purchasing power when importing this
equipment and purchasing supplies and inventory from the global
Mr. Murphy added that businesses should consider taking advantage of
BMO's Online Banking for Business platform that will assist them in
making important foreign exchange transactions effectively.
Online Banking for Business provides customers with a comprehensive
view of their financial information, including payments products and
banking services in an easy-to-use internet environment. Customers
from small businesses to the very large capital market corporations
are able to manage all a
spects of their treasury needs - from global
cash management to foreign exchange services to investments, loans,
and trade finance - all from a user-friendly customizable home page.
For more information on BMO cash flow management tools and products
please visit http://www.bmo.com/home/commercial or contact your BMO
Bank of Montreal representative.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a
highly diversified North American financial services organization.
With total assets of $542 billion as at January 31, 2013, and more
than 46,000 employees, BMO Financial Group provides a broad range of
personal and commercial banking, wealth management and investment
banking products and solutions.
Peter Scott, Toronto
Matt Duffin, Toronto
Ronald Monet, Montreal
Laurie Grant, Vancouver
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