Loonie Underpriced in Big Banks’ Eyes as 2017 Hike Risk Remains
- Scotia, RBC, TD and BMO say currency poised for year-end rally
- Bank of Canada policy decision, forecast update due Wednesday
Canada's Morneau on Recession Risks, Nafta Talks
Wednesday’s Bank of Canada meeting is set to revive a six-month surge in the loonie that’s stalled in recent weeks, according to the country’s biggest lenders. That’s good news for speculators who remain near the most bullish on the currency since 2012.
Bank of Nova Scotia Chief Foreign-Exchange Strategist Shaun Osborne says the Canadian dollar is poised to rally to C$1.20 versus its U.S. counterpart by year-end, from about C$1.27 at 7:45 a.m. New York time, as traders who’ve been reducing expectations for a third BOC interest-rate hike in 2017 begin to price one back in. He’s joined by analysts at Royal Bank of Canada, Toronto-Dominion Bank and Bank of Montreal who all say the currency is poised to resume its ascent.