The survey found that the Canadian dollar will give up some of its recent gains in the coming months

A Reuters survey published on Thursday found that the Canadian dollar will give up some of its recent gains in the coming months, but could rise again in 2025 if the central bank easing cycle reinvigorates the global economy and stimulates demand for commodities.

(One-hour chart of the US dollar against the Canadian dollar)

Since hitting a near two-year low of C $1.3946 (71.71 cents) in August, the Canadian dollar has risen 3.3 percent, driven by short covering and a broader decline in the dollar.

In the August 30-September 4 survey, the median forecast of more than 30 foreign exchange analysts showed that the Canadian dollar would decline by about 1% to 1.365 in three months, compared with the August survey's forecast of 1.380.

The currency is expected to rise by 1.3% to 1.3333 in a year's time, compared to previous expectations of 1.3350.

foreign exchange trading platformJimmy Jean, chief economist, said "the Canadian dollar has risen much more than we expected", adding that the currency could weaken in the short term if expectations of a "super-sized" Fed rate cut start to fade.

Investors are watching Friday's U.S. and Canadian jobs reports to see if central banks will ease policy by 50 basis points instead of 25. The U.S. unemployment rate rose to a near three-year high of 4.3 percent in July, rattling financial marekts and raising fears of a recession.

The Bank of Canada cut its base rate on Wednesday, its third cut since June, by 25 basis points to 4.25 per cent. The Fed is expected to begin its easing cycle later this month.

However, the effects of monetary policy tend to lag, so it may take some time for the global economy to feel the impact of lower borrowing costs. Canada is a major producer of commodities such as oil, so the Canadian dollar tends to be sensitive to the global outlook.

Oil prices fell to their lowest level this year on Wednesday as weak economic data from the US and Asian powers reinforced expectations of a weaker world economy.

"By the second half of 2025, the effect of rate cuts should be more pronounced," said Mr. Jean. "We expect oil prices to pick up slightly in large Asian countries and Europe in the second half of 2025, so global demand will push prices slightly higher."