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A major European bank recommends buying the loonie next year, but not against the U.S. dollar.

Actually, as Société Générale sees it, it's basically the U.S. and Canadian dollars against just about everyone else in 2015.

"We believe that the north American currencies will outperform next year because of the divergence of monetary policy," said Paris-based Vincent Chaigneau, the bank's head of rates and foreign exchange strategy, who recommended in a 2015 outlook that investors favour the greenback and the loonie, as Canada's dollar coin is known.

The Canadian dollar is "cheap" this year, having been driven down by the slump in oil prices and a neutral central bank.

But Mr. Chaigneau believes the loonie will track its U.S. counterpart higher next year, outperforming other currencies like the euro, the yen, the Swiss franc, the Swedish krona and Norway's Krone.

Behind that is the idea is that the Federal Reserve moves soonish to hike its benchmark rate from its emergency low, and that the Bank of Canada follows soon after, though not too soon.

Other central banks will still be in battle mode.

While the Fed will be "cautious," the U.S. economy is on the upswing, underscored by an employment report Friday that showed strong job-creation of 321,000 in November.

Mr. Chaigneau's colleague at Société Générale, senior foreign exchange strategist Sébastien Galy, added in the same report that the Canadian economy will increasingly be buoyed by the U.S. rebound, given the weaker loonie and, potentially, a "more robust" U.S. consumer as pump prices ease, putting more money in the pockets of Americans.

"Exports to the U.S. have been steadily improving and should continue to do so," Mr. Galy said.

"This mechanism should differentiate CAD sharply from other commodity currencies, helping it to outperform AUD and the like," he added, referring to the Canadian and Australian dollars by their symbols.

"More importantly, there are increasing signs that Canadian business is starting to invest and that the recovery is broadening, following a classical progression."

Having said all this, the oil markets are in turmoil amid the price collapse, and who knows where that all shakes out.

What happens if the "oil debacle" has yet to run its course, asked Société Générale's Olivier Korber.

"Our commodity research reckons that downside risk exists, which they attribute to long-dated prices," Mr. Korber said in the lengthy report.

"In previous price cycles, when crude prices move higher or lower, production costs tend to also move higher or lower as oil companies negotiate," he said.

"In a lower price environment, the costs that we expect to anchor the forward curve might be lower than currently anticipated. This has far-reaching implications."

Against the U.S. dollar, Société Générale sees the loonie slipping to about 85.5 cents U.S. by next March, and then picking up to 87.8 cents by mid-year before closing out 2015 at 88.5 cents.

Bank of Nova Scotia also put out new projections this week, suggesting the loonie will go 86 cents for the first half of next  year, then dip to the 85-cent level, and even further in 2016 to the 84-cent mark.

"The dramatic drop in oil prices will negatively impact Canada from the perspectives of trade, investment, growth, fiscal and sentiment," said chief currency strategist Camilla Sutton.

"The uptick it provides to the U.S. economy should mitigate some of the downside, but [West Texas Intermediate] oil prices at US$70 (Scotiabank's forecast for the average level of WTI in 2015) are a net negative to the domestic backdrop, weighing on both inflation and growth," she added.

"This has been the most significant development that has forced a revaluation of the CAD outlook."

"Indeed, it will save consumers in the four major advanced economies over $200-billion a year in motor fuel costs alone," the group added, referring to the United States, the euro zone, Japan and Britain.

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