Canada recently reported its worst quarterly economic performance since the 2009 recession.

Annualized real GDP declined 1.6% in the second quarter, primarily due to a collapse in foreign trade. In fact, Canada’s economy has been trapped in a low, sluggish growth track for over two years, and the economic prognosis for 2017 is hardly improved.

There is an obvious currency takeaway from the Bank of Canada’s observations on Canada’s weak economic outlook and from the Federal Reserve’s (FOMC) statement and projections issued on September 21, 2016.

The Fed’s announcement held the U.S. federal funds rate at 25 bps. Accompanying projections from Fed officials also suggested that the funds rate could increase to 50 basis points by the end of this year, to 1% by the end of 2017 and to 2% by the end of 2018.

In other words, Fed officials completely recognize that the new normal is a continuation of low inflation accompanied by low interest rates.

Given Canada’s weak economic outlook, the central bank’s benchmark interest rate is likely to remain low (or unchanged) for another year or perhaps even longer.

Canada’s overnight benchmark rate is currently 50 basis points, and it could stay at this low level right through to the end of 2017.

The US federal funds rate, which is currently only 25 basis points, could increase to 50 bps by the end of 2016 and to 100 bps by the end of 2017.

Forecasting the Canadian dollar trading range is as difficult as forecasting the stock market. At any time, a substantial change in the price of oil or even the possibility of a Bank of Canada interest rate cut could sharply move the C$.

Nonetheless, in light of the two central bank priorities together with the likelihood of a slight improvement in US and global growth next year, the current trading range for the Canadian dollar of 76-78 cents US could hold right through until the end of 2017.