Live Updates > Live Update Details
2025-12-18 20:30:46
[Monetary Policy Paths to Diverge; Canadian Dollar Favored by Institutions, Strong Performance Expected to Continue into 2026] ⑴ Institutional analysis points out that the Canadian dollar is ending the year strongly, appreciating against all G10 currencies except the Swedish krona. ⑵ The recent rebound in the Canadian dollar reflects better-than-expected economic data and a clearer policy implementation path from the government since the budget announcement in early November. ⑶ The institution believes that after nearly a decade of synchronized monetary policies, the policy paths of the United States and Canada are expected to diverge in 2026. ⑷ This divergence in monetary policy cycles is expected to continue to support the Canadian dollar and its appreciation prospects. ⑸ The institution sets a target of 1.32 for the USD/CAD exchange rate by the end of 2026, but also notes that the exchange rate's movement towards this level is unlikely to be linear and may be accompanied by fluctuations.
