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Prepare for a 65-cent loonie in 2017 Add to ...

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A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading this morning on the Web

Australian investment bank Macquarie warns Canadians to prepare for a 65-cent loonie, caused primarily by the divergent policies of the Federal Reserve and the Bank of Canada,

“Consensus continues to view the crude oil price as the primary driver of CADUSD, a legacy of the strong relationship that existed from 2001-9. In contrast, we believe the currency pair is primarily driven by relative monetary policy expectations as captured by the 2-year sovereign yield spread…Policy divergence suggests the 2 year sovereign yield spread can continue to widen... We lower our end-17 CADUSD forecast to $0.65 (prev. $0.69, cons. $0.74)… Our outlook assumes a BoC rate cut and our energy team’s baseline forecast for $57 WTI crude in 4Q17. “

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