Canadian dollar forecasts cut as economy loses steam

Desjardins Group had predicted the loonie would hit 74 U.S. cents by the end of this year, but has now cut that forecast by three cents. Photo by Peter J Thompson/National Post

The Canadian dollar is losing ground, prompting some economists to cut their forecasts for the currency “substantially.”

Desjardins Group had predicted the loonie would hit 74 U.S. cents by the end of this year, but has now cut that forecast by three cents to 71.

“Our year-end USDCAD forecast of 1.35 [74 U.S. cents] now appears a long shot,” said Desjardins chief economist Jimmy Jean and foreign exchange strategist Mirza Shaheryar Baig in a recent report.

“We have changed our forecasts and now expect the loonie to remain soft in the next two quarters before gradually strengthening towards the end of next ye