16.05.201608:11:00UTC+00Usd/cad Likely to Move Towards 1.25 by 2016-End

The USD/CAD pair ended at around 1.30 in April. The appreciation of the Canadian dollar was mainly due to stronger oil prices and resilient outlook of Canada’s economy. Moreover, the labor market further tightened in April while retail sales posted stronger figures than market projections. The Bank of Canada showed that it continues to be upbeat regarding the domestic economic strength and kept the monetary policy on hold for the ninth straight month.

But Governor Polozwas mentioned that the Canadian dollar’s appreciation is a possible threat for non-resource exports. The currency has appreciated 12% since mid-January. The export growth of non-resource goods is essential in order to maintain economic stability. This indicates that the central bank is cautious about the CAD’s further appreciation. If oil prices continue to increase, the USD/CAD pair is expected to move lower towards 1.25 by the end of 2016, said Lloyds Bank in a research report.