Canadian Dollar Set To Drop To Lowest Figures In 15 Years According To Expert

One of the currency market’s biggest experts has recently given a forecast that currency exchange Montreal might not like. The expert says that the Canadian dollar’s value will hit low levels that have not been seen in the country for over 15 years, thanks to intensifying trade turmoil.

John R. Taylor, who was the former head of what was one of the world’s largest currency hedge funds, says that he’s gone and analyzed the statistical patterns surrounding the Canadian dollar and projected that the dollar is set to weaken by 20%, down to $1.60/US$ by the end of 2019. If the Canadian dollar does fall to that level, it will hit lows that have not been seen by currency exchange Montreal since August 2002. The forecast does not bode well, which goes hand in hand with the potential hit to Canadian exports as President Trump tinkers with NAFTA and sets new tariffs on metals.

According to Taylor, the growing value of the US$ since February set the stage for this move, and the data suggests that the cycle has about 2 years and 3 months more to go. Projections say that the 1.3350 drop in May would only be the first step. He says that Prime Minister Justin Trudeau and Canada will try to stop this, but with the competition being the US, it’s a bully’s mismatch, and the reaction will be the Canadian dollar weakening in comparison to the US$.

The Bank of Canada kept current policy rates unchanged, saying that increasing global trade tension was one of the reasons for not rushing to lift rates.

US Commerce Secretary Wilbur Ross held out some hope that Canada and Mexico would be spared from the new tariffs that are going into effect into the end of May 2018. He says that a calculated method to the tariffs could be used and it wouldn’t be unreasonable, as a result, that countries like Canada and Mexico can be made exempt from their effects.

Traders in currency exchange Montreal aren’t really taking Secretary Ross’s words, with the loonie going down by about 0.8% on the 29th May to about 1,298/dollar.