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11/18/2005
The interest rate differential between the US Dollar bank deposits and the deposits in Canadian Dollars is expected by market participants to peak in January 2006. After that date the differential is expected to shrink to 0.73 by December 2006 and down to 0.57 by December 2007.
My guess is that the interest rate differential helps driving the exchange rate at the moment, but the market will have to find something else (such as trade deficits, budget deficits, inflation, GDP growth etc) to concentrate on to drive this currency pair.
This is not a trade recommendation and no one should treat it as such.
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Recommended Links on this topic:
Projected Future Eurodollar, Federal Fund, Libor, EuroYen, EuroSwiss, Euribor, Australian, Canadian and New Zealand Interest Rates |
