Canadian dollar likely to rebound before year end

The plunge in the Canadian dollar to a thirteen-year low of US$0.69 has forecasters jumping on the bearish bandwagon with increasingly pessimistic forecasts for the year ahead, mainly over fears that the global economy is in a meltdown. We think this is an over-reaction and expect most commodity prices to rebound. If oil prices recover later this year as we anticipate, then that should trigger a rebound in the loonie to US$0.75 by year-end.