Loonie Bears Aren't Nearly Bearish Enough, Morgan Stanley Says
- Bank joins Macquarie calling for currency to fall to C$1.45
- Cheaper Canadian dollar would bolster exports, manufacturing
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Almost no one -- from the Bank of Canada, to currency traders to Wall Street prognosticators -- grasps how far the Canadian dollar must fall to revive the nation’s economy after the collapse in oil prices, according to Morgan Stanley.
The New York-based bank has joined Australia’s Macquarie Group Ltd., both among the 10 most accurate currency forecasters, in predicting the Canadian dollar will drop almost 9 percent next year after losing a quarter of its value since 2012. The decline would push the currency to C$1.45 per U.S. dollar, the cheapest since 2003, while the median forecast in a Bloomberg survey of 73 participants is for it to bottom at C$1.35 in 2016.