Canadian dollar’s outlook for 2023 uncertain as interest rate hikes wane: experts

Experts say the outlook for the loonie in 2023 largely is determined by commodity costs, how the U.S. greenback fares, and whether or not central banks are profitable in avoiding a significant recession.

The Canadian greenback lately rose to its highest stage in additional than two months towards the U.S. greenback, which gained power Friday after a stronger-than-expected jobs report.

However, analysts are predicting some additional weak spot within the U.S. greenback in 2023.

In a report early January, Scotiabank stated the Canadian greenback’s outlook for the yr is very contingent on exterior developments, with commodity costs and valuation potential positives for the greenback.

Michael Greenberg, senior vice-president and portfolio supervisor at Franklin Templeton Investment Solutions says if the financial downturn provoked by central banks’ insurance policies is harsher than anticipated or hoped for, that will weaken the loonie.

Meanwhile, he says a gentle touchdown would imply power for the Canadian greenback.

This report by The Canadian Press was first printed Feb. 6, 2023.