The Canadian Dollar could face a moribund year ahead if UBS's latest forecasts for the Bank of Canada (BoC) interest rate prove correct, because analysts at the global investment firm are saying the BoC will sit on its hands until at least the first quarter of 2020.
The Canadian Dollar is likely to cling onto its position as the best performing currency in the G10 universe for the time being but the summer months will see renewed weakness push Loonie exchange rates lower, according to the latest forecasts from J.P. Morgan.
The Pound-to-Canadian Dollar rate is set for more range-bound trading during the week ahead as oil prices dominate the narrative around the Loonie while the Brexit saga and GDP data are front and centre for Sterling.
The Canadian Dollar strengthened Friday after official data caught the market off-guard with a strong increase in job creation during January, although analysts are sceptical of whether the gains will be maintained for very long.
The Canadian Dollar remained the G10 universe's best performing currency for 2019 on Monday but it could soon run out of road if the economy does not pick up, according to one analyst who says Friday's labour market data could see the Loonie stall.
In the medium-term, we are still marginally bullish based on the fact the pair has broken clearly above the range highs on two occasions, as well as the up-sloping nature of the range lows which have risen over time - both are signs of bullish intent.