Whist interest rate differentials favour the Canadian dollar versus the greenback after the US rate cuts, potential gains are limited due to uncertainty about the Canadian economy's vulnerability to a US slowdown.

The deputy governor of the CCB Paul Jenkins said “The central bank was poised to provide more stimuli to help prevent problems in the slowing domestic economy”.

We are still expecting multiple interest rate cuts, with the next rate cut due at the meeting in March. However with the expectations of multiple cuts in the UK, we believe the cross will remain range bound between 2.09 and 1.94 in the near future.