USD/CAD: Loonie to weaken further before a turnaround in H2 – CIBC

The Loonie has not moved much in the last month, with USD/CAD bouncing around 1.3500. Economists at CIBC Capital Markets analyze the pair’s outlook.

USD/CAD to reach 1.2900 by the end of 2025

We don’t expect the BoC to pivot further towards setting the stage for rate cuts until its April MPR, at which point the Loonie is likely to weaken further, with USD/CAD set to peak at 1.3700 in Q2. 

Once the Fed is on the policy normalization path starting in Q3, broad USD weakness should help give the CAD a lift, with higher commodity prices in 2025 also boosting the currency. 

We continue to see USD/CAD reaching 1.2900 by the end of 2025.