Loonie To Resume Ascent In 2008, Says Scotiabank

"The Canadian dollar is poised for a fresh round of appreciation against the U.S. dollar," it said. "Overall, the fundamentals for Canada remain solid," said Camilla Sutton, a currency strategist at Scotia Capital. "What we've seen in prior U.S. weakening times, particularly in U.S. recessions, is the Canadian dollar gets range-bound. I think that's what's happening right now. "But as we move further out into the year, interest rate differentials are supportive of a strong Canadian dollar, and commodity prices though potentially not making new record highs are still very elevated. "As well we've got a fundamental backdrop which is still holding up much better than the U.S.," said Sutton, citing Canada's high employment rates and trade and budgetary surpluses. Scotiabank's outlook is more optimistic than other recent forecasts. In early January, a Bloomberg survey of 43 analysts predicted the loonie would weaken 5.6 per cent in 2008, the biggest drop since 2001, to 94.3 cents US. ... http://www.canada.com/reginaleaderpost/story.html?id=aa2b144a-ff9a-414b-af0c-bfd428a802ec

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