Can the US Dollar Keep the Rally Going?

The US dollar could give back some of its recent gains in a hurry if economic data starts hinting at a slowdown. That’s what our forecast calls for, and it would also mean lower US bond yields. In the very short term, we’ll have to keep an eye on Congress to see if it can avert a government shutdown. The Canadian dollar and other currencies stand to benefit from lower US bond yields. However, we expect Canada’s economy to slow as well, which would send its bond yields lower too. We also don’t think oil prices will stay high for much longer. Bottom line? The Canadian dollar could weaken slightly by the end of the year.