Loonie likely to come under further pressure in 2024: strategist

The Canadian dollar could decline in the months ahead as the market underestimates the divergence which may take place between Bank of Canada and the U.S. Federal Reserve’s monetary policy, one strategist says.

Adam Button, chief currency analyst at Forexlive, agrees with Schamotta's outlook.   He is predicting a US$0.69 cent Canadian dollar in the New Year should Canadian monetary policy diverge from the U.S.   "The year ahead will be extremely tough for the Bank of Canada,” he wrote in an email to BNN Bloomberg. “The Governor Tiff Macklem will continue to face criticism for the infamous pledge to keep rates very low for a very long time as mortgages reset and the spring real estate market disappoints.”   At some point in 2024, Button believes the bank will face the difficult question of whether to allow Canadian monetary policy to diverge from the U.S.    "Cutting more aggressively than the Fed risks re-igniting inflation via the currency but that’s the path they will be forced to take," he said.