07:22 AM EDT, 08/29/2025 (MT Newswires) -- Except for the New Zealand dollar (NZD) -- which was hit by a dovish cut from the Reserve Bank of New Zealand -- the Canadian dollar (CAD or loonie) has been the worst-performing G10 currency in August, said ING.

The bank remains bearish on CAD against the euro (EUR) and European currencies, as well as other commodity currencies, as Canada's deteriorating economic outlook points to more room for Bank of Canada cuts.

Thursday, it was reported that Canada's Q2 current account deficit was the largest on record due to a drop in exports to the United States. That increases the risk of a sub-consensus Q2 gross domestic product print on Friday: expectations are for a 0.7% annualized quarterly contraction, stated ING.

Markets are only pricing in a BoC rate cut in December, but ING suspects there are high chances of a September or October move and another cut in 2026 before reaching a 2.25% terminal rate.

Given the bank's bearish USD call, it doesn't forecast much support for USD/CAD, but the bank still expects the loonie to lag other G10 currencies.