Cambridge Mercantile Group

Cambridge Mercantile Group

January 14, 2014 09:00 ET

Cambridge Mercantile's 2014 Currency Forecast and Market Outlook

TORONTO, ONTARIO--(Marketwired - Jan. 14, 2014) - Editors note: There is one video accompanying this press release.

Highlights:

  • Loonie to finish 2014 at 94 cents
  • US recovery and Canadian trade deficit expected to push CAD lower in Q1 & Q2
  • US and Canadian importers urged to plan on prudent risk management strategies in light of Loonie uncertainty

Cambridge Mercantile Group, a corporate global payment and risk management solution provider, is forecasting the USDCAD plunge to settle at 94 cents by the end of 2014. Several factors have led to the loonie's weakening, which the company's market analysts have been following closely, including Canada's export decline put in focus recently by the Bank of Canada, poor commodity performance, the economic slowdown for China, Canada's major trading partner, in addition to a US dollar bolstered by the recent tapering of the US Federal Reserve's bond buying program.

"After a number of years seeing very positive sentiment for the loonie, we've seen a shift that has become increasingly negative. The Canadian dollar has suffered over the last couple of months, slipping more than seven cents to the U.S. dollar. We expect this depreciation to continue and a dip returning to 94 cents against the greenback through the latter half of 2014," says Frey.

According to Cambridge, the Bank of Canada also played a role in the lacklustre loonie as of late by stepping away from talks of raising interest rates. The prolonged global recession and monetary policies from major central banks of the world will remain key influences on currency markets in 2014 and may also influence the CAD's downturn.

"We're seeing a much different story this year for the greenback and that's going to impact the Canadian dollar. The U.S. Federal Reserve is expected to pull back on monetary accommodation and taper its monthly asset purchases, which will translate into higher U.S. interest rates for the greenback and for U.S. treasuries and thereby drive up demand for the currency's value."

As for the worldwide currency market landscape in 2014, expect it to look much different this year as economic recoveries in the U.S. and U.K. gain traction, says Frey.

"The introduction of non-conventional monetary policy options for the European Central Bank will put pressure on the euro over the next few months. The biggest risk factor looking forward to this year however, will be how the global economy and the U.S. in particular contend with the Federal Reserve pulling back on monetary stimulus."

The company is offering strategic advice to both corporate clients and small businesses who are preparing to hedge against the USDCAD in order to mitigate risk as well as gain a return from the pair's movement.

About Cambridge Mercantile Group

Since its inception in 1992, Cambridge Mercantile Group has grown to become a leading provider of global payments and currency risk management solutions. With more than 14,000 clients worldwide, Cambridge is among the largest bank-independent providers of hedging and risk management products, powered by technologies widely regarded as industry leading. Cambridge delivers a superior level of service to clients through extensive knowledge of foreign exchange and award-winning operational capabilities, supported by an experienced trading, account management and consultative sales team. With offices strategically located across the globe, including North America, Europe and Australia, Cambridge facilitates the secure movement of over $20 billion annually. For more information, visit www.cambridgefx.com.

To view the video accompanying this press release, click on the following link: http://www.youtube.com/watch?v=phFiq9ndXyo

For more information and to arrange an interview with Mark Frey, please see the contact information below.

Contact Information