Bloomberg, BOC, Macrobond, S&P Dow Jones, RBC GAM, Note: *Consists of advanced purchases and additional purchase In this monthly webcast, Eric Lascelles, Chief Economist, RBC Global Asset Management, shares his latest views on the global economy and offers insight into todayâs economic issues. Note: As at Nov, 30, 2020. While China remains an important U.S. adversary and while Biden may eventually pivot toward dealing with Russia, Iran and others – we think he has more important domestic priorities to tackle during his first 100 days in office. You will get notifications straight to your inbox when new publications are released. We are bullish for several reasons: Note: As at Oct, 31, 2020. Discover more insights from this quarter's Global Investment Outlook. Second, Biden’s friendlier foreign-policy stance offers relief to a market exhausted by combative tweets and will provide a boost to the countries that had attracted the most attention from the Trump administration. While investors have begun to subscribe to our view and are buying the Canadian dollar, we don’t think that the currency’s recent strength necessarily reflects this newfound optimism. We think the reason lies in the fact that shorter-term themes such as the pandemic, Brexit and U.S. political uncertainty have left investors shying away from shorting the dollar. That’s the sobering picture painted by RBC Economics through Navigating 2021: 21 Charts for the Year Ahead. Key quotes “The Canadian dollar recovered its pandemic related losses against the US dollar as risk appetite improved. As at Nov. 30, 2020. Current Exchange Rates; February 01, 2021: Currency Exchange Rate; Japanese Yen to Dollar: 104.95: Euro to Dollar: 1.206: U.K. Note: All information on this page is subject to change. Further bolstering the argument for this pair going lower is the fact that the Canadian economic figures as of late have shown inflation rising, which is good for a … However, the currency could still experience a challenging end to 2020 before it embarks on a more sustained trend of appreciation, owing to short-term challenges facing the domestic and global economy. The pound has rallied alongside these headlines, benefitting also from U.S. dollar weakness, and is reflecting more optimism than U.K. equities, suggesting the pound may be overvalued (Exhibit 9). Combining data from Statistics Canada and its own internal forecasts, it said the Canadian economy a low in Q2 2020, mustering just 86.6% of real GDP relative to Q4 2019. High exchange rate 1.337, low 1.297. Country-specific factors are also playing a part, with investors noting that Canada is better positioned than many countries to provide the fiscal support needed to buttress the domestic economy in a post-pandemic world. The Canadian dollar forecasts have, however, been revised substantially higher from the previous month. Data derived using 90d rolling correlation. A stronger Chinese currency acts to improve the competitiveness of China’s trading partners because China accounts for an increasing percentage of their trade. In its latest housing market forecast, RBC predicted that the national benchmark price will grow by 8.4% to reach $669,000 this year. FXStreet will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Moreover, Canada has pre-ordered more vaccinations per capita than any other developed nation (Exhibit 11), which should translate into a quicker economic recovery once those doses are administered. USD/CAD remains in a consolidation phase as the … Every quarter, the RBC GAM Investment Strategy Committee (RISC) develops a detailed global investment forecast. Shares in Gamestop (GME) are strong on Friday currently at $82.77. Political crises such as negative publicity around Prime Minister Trudeau’s ties to a charity and his government’s efforts to bury what many are calling a scandal have hardly registered abroad. Oil extraction as a percentage of GDP has dropped to 2% from 6% over the past five years, and the energy sector’s share of business investment has shown a similar trend (Exhibit 12). Source: Bloomberg, Morgan Stanley, RBC GAM. Source: Haver Analytics, UBS, RBC GAM. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. Read their latest thinking in this in-depth quarterly report and watch videos that highlight their views. China accounts for an ever larger share of the global economy and its influence has grown further this year as a newly inked trade deal was struck in November with 14 of its Asian neighbours. With lower yields abroad, Japanese investors have been showing a preference for domestic assets (Exhibit 8) and lower hedging costs have led to increased hedges on foreign investments. One similarity is that deflation in Japan has returned, bolstering real yields and boosting the attractiveness of Japanese government bonds. January 8, 2021 Interest rates (%, end of quarter, ) Exchange rates (end of quarter) Forecast Forecast 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 2019 2020F 2021F 2022F Canada Either way, there will be a resolution to the Brexit saga in the few weeks that remain before the December 31 deadline. Canadian Dollar Update, January 28, 2021 – Canadian Dollar Crushed USD/CAD Open: 1.2854-58, Overnight Range: 1.2798-1.2879, Previous Close: 1.2803 WTI … Prices for these exports have seen a decent rise over the past few months. Note: As at Oct. 13, 2020. US Dollar to Canadian Dollar forecast for March 2021. You can change your location here. 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