Don’t miss this month’s edition of the George Davis Report, where George summarizes RBC’s macroeconomic outlook for 2024 and the implications for monetary policy and the Canadian dollar.
What you need to know:
We continue to flag the risk of a recession in Canada and the US as the lagged impact of interest rate hikes take their toll into 2024.
“Soft landing” versus “hard landing” outcomes would present very different cross asset reactions in markets.
Central bank optionality will remain a feature as more progress needs to be seen on inflation and wage growth before victory can be declared.
Market pricing is calling for rate cuts sooner than RBC’s forecast profile and may suggest that the market is too optimistic at this juncture.
Our USD/CAD forecasts remain above consensus in H1 2024, but converge toward the consensus in the second half of the year.
For the trading range:
USD/CAD
Buyers
1.3300/1.3400
Sellers
1.3700/1.3800