Goldman Sachs
Global FX Strategy 2026
LIVE10 January 2026USD bearish
Back to CurrenciesModerately Bullish
USD/CAD
Mean-reversion as headwinds fade
GS Forecast Path
vs Prior ForecastCurrent target: 1.35Prior target: 1.36Revision: -0.7%
Cross-Firm Forecast Comparison
Key Drivers
USMCA outcome
Oil prices
BoC terminal rate
Trade policy
Valuation mean-reversion
All Firm Targets (Dec '26)
JPMModerately Bearish1.42
BARCModerately Bearish1.36
GSModerately Bullish1.35
BofAModerately Bearish1.35
INGModerately Bullish1.34
MSModerately Bullish1.34
MUFGModerately Bullish1.34
DBModerately Bullish1.32
Key Issues for 2026
1.USD/CAD has overshot fundamentals on tariff fears and BoC cuts
2.USMCA renegotiation expected to conclude without major disruption
3.BoC approaching terminal rate, limiting further easing headwind
4.Oil price stabilization around $70-75 supports CAD
5.Valuation metrics suggest CAD is 3-5% cheap vs fair value
Risk Scenarios
Bullish1.30-1.33
USMCA resolved favorably, oil rallies, BoC holds
Moderate - GS base case1.35
Gradual normalization, USMCA resolved, oil stable
Bearish1.42-1.45
USMCA collapses, tariffs escalate, BoC cuts further
Analysis Summary
Moderately bullish CAD with USD/CAD declining to 1.35. BoC easing cycle approaching end, USMCA resolution expected, and oil price stabilization supports. CAD weakness has overshot fundamentals; mean-reversion likely.