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.