Invesco CurrencyShares Canadian Dollar Trust [FXC] Stock Forecast

Outlook on future BoC interest rate hikes. Outlook on Canadian economic growth in Q3.

A Canadian dollar currency-related exchange traded funds gained after the Bank of Canada came out with a surprise one percentage point interest rate hike to combat the rising inflation levels. The Invesco CurrencyShares Canadian Dollar Trust (FXC) rose 0.2% on Wednesday.

Since December, despite a parabolic move in fossil fuels (priced in U.S. dollars), the Canadian dollar has not followed along for the ride.

Bank Of Canada Hikes Rates, Signals More To Come In Fight Against Inflation

Global economic recoveries are happening around the world despite the swift rise in COVID cases from the Omicron variant, and this should help benefit the Canadian dollar. “The Canadian dollar is expected to strengthen over the coming year as global economic recovery continues from the COVID-19 crisis but gains for the currency could be kept [.

Retail investors trading instruments linked to currency pairs on the exchange in November indicated a positive outlook for the Canadian and Australian dollars, as well as the British pound, against the US dollar. For much of last month, the Federal Reserve stood out from many central banks by maintaining a looser monetary policy than several of its peers, leading investors to favour other currencies over the US dollar in the short term.

Omicron's emergence will mean the BoC will tread carefully. However, strong growth, a booming jobs market and bubbling inflation pressures suggest we remain on course for four rate hikes in 2022.

Housing starts skyrocketed 21.6% month over month (m/m) in March after the 11.7% m/m decrease in the previous month. Urban multifamily starts soared 33.8% m/m to an all-time high while single starts jumped 3.6% m/m, reaching the highest level since April 2010. Rural starts increased 2.0% m/m.

Canadian government bond yields have increased along with global rates, while the Canadian exchange rate has strengthened against the currencies of Canada's largest trading partners. Although the BoC is also likely to pull forward their guidance for when rate hikes are likely to begin (from 2023 to 2022), we don't think they should be in a hurry to raise overnight rates.

A blowout jobs report in March gave the Canadian dollar a boost, which is seeing bullish interest from traders. ETF investors can angle this play via the Invesco CurrencyShares Canadian Dollar Trust (FXC).

Invesco CurrencyShares Canadian Dollar Trust is a US stock and trading under the symbol FXC

Invesco CurrencyShares Canadian Dollar Trust stock price is $72.58 today.

Yes, Invesco CurrencyShares Canadian Dollar Trust is a publicly traded company.