Canadian dollar likely to fall further

The recent depreciation of the Canadian dollar is likely to continue this year and next. Our reasons for thinking so are the prospects of further declines in commodity prices and lower expectations for interest rate differentials between Canada and the US. Overall, we expect the Canadian dollar to decline from US$1.02 to US$0.92 by the end of this year, then US$0.86 by the end of 2013.

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