Once flying high among currencies, loonie faces downgrade to 88-cents, says bank

Posted by Ravi Gulati | Posted in Economy & Markets | Posted on 03-12-2013

U.S. investment banker Goldman Sachs is the latest financial house to sell the loonie short, forecasting the currency to coast into the 88-cent range next year. That is an even gloomier outlook than the one issued by the TD Bank a few months ago, which predicted it near 90 cents by the close of 2013.

The loonie closed up 0.08 of a cent at 94.46 cents US on Thursday on the news that Canada’s current account deficit had narrowed. It may gain a little more lift Friday if Statistics Canada reports, as expected, a healthy 2.5 per cent advance in the economy for the third quarter.

But these temporary recoveries are fooling no one — the loonie has lost about seven per cent in value from the beginning of the year and fundamentals point to further deterioration.

Once flying high among currencies, loonie faces downgrade to 88-cents, says bank | Toronto Star.