CAD to underperform alongside USD – MUFG

USD/CAD has declined to close to fair value. Economists at MUFG Bank analyze the pair’s outlook.

Fed-BoC alignment set to continue in 2024

2002-2005 & 2010-2013 were periods of tighter BoC policy relative to the Fed – this is unlikely to emerge in 2024. Market expectations are very tightly aligned for the Fed and the BoC to move in tandem in 2024 which seems likely to us.

Increased equity market volatility in 2024 as US growth slows will have implications for CAD given CAD/S&P correlation. If equity market volatility picks up next year that could see CAD suffer more than other G10 currencies especially if source of volatility is US-related.

CAD undervaluation has been eliminated over recent months. USD/CAD has reverted toward fair value limiting potential scope for outperformance going forward.

Dec 19, 2023

Window for further USD weakness against the EUR and GBP could prove short-lived – MUFG

USD suffers worst sell-off since July but will downward momentum be sustained this time around? Economists at MUFG Bank are sceptical that this US Dollar sell-off can be sustained.

UK CPI Preview: Forecasts from four major banks, inflation to ease further

The United Kingdom will release the Consumer Price Index (CPI) data on Wednesday, December 20 at 07:00 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of four major banks regarding the upcoming UK inflation print.