Does the loonie need immunity?

Today’s forecast for Canadian dollar
Ottawa lost the highest credit rating but bears in USD/CAD won’t put up a white flag
What doesn’t kill you makes you stronger. We all thought that USD/CAD bears will got weaker as Washington threatened to tax Canadian aluminium imports once again and the Fitch agency downgraded Canada’s Foreign Currency Issuer Default Rating (IDR) from ‘AAA’ to ‘AA+’. Yet the pair is trying to return to downtrend after a 3-week correction amid oil news and rumours of an overnight rate rise in 2022 and despite the greenback’s strong positions inspired by an idea of the US economy’s double recession.

In April the economy of Canada fell 1.6% to the 10-year trough of C$1.63 trillion. In March-April the loss was 18.2%. According to Governor of the Bank of Canada Tiff Macklem, GDP is at the early stage of a long recovery.

Still, currency markets predict a 50% chance of monetary restriction in 2022. This is a bearish factor for USD/CAD against the background of Fed’s unwillingness to raise the federal funds rate before 2023. Investors wrongly believed that the new governor will be more “dovish” and will cut the overnight rate to below zero. The loonie is making use of that mistake.
USD/CAD and oil dynamics

For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/does-the-loonie-need-immunity/?uid=285861726&cid=58534