By Fergal Smith

TORONTO Analysts have raised their bullish forecasts on the Canadian dollar as central banks globally, including the Federal Reserve, move closer to concluding interest rate hiking campaigns, a Reuters poll showed on Thursday.

The median forecast of nearly 40 currency analysts was for the loonie to strengthen about 2.0% to 1.31 per U.S. dollar, or 76.34 U.S. cents, in six months, compared to 1.32 in last month's forecast.

It was expected to rally to 1.29 in a year, a gain of 3.6%.

"We expect the USD to soften broadly over the next 12 months as the Fed's tightening cycle starts to reverse," said Shaun Osborne, chief currency strategist at Scotiabank.

Investors are betting the Fed is close to completing its tightening campaign and will shift to rate cuts in the first half of 2024.

That would likely be supportive of the global economy. Canada is a major exporter of commodities, including oil, so the loonie is particularly sensitive to global economic prospects.

U.S. crude oil futures touched on Wednesday their highest level since mid-April at $82.43 a barrel before giving back some recent gains.

"The Bank of Canada is liable to ease interest rates more or less in line with the Fed in 2024 but support for the CAD should come from a generally softer USD, reflecting investor diversification away from USD-denominated assets, and an improving global risk backdrop as central banks broadly move away from tightening monetary policy," Osborne said.

The Canadian central bank last month raised its benchmark interest rate to a 22-year high of 5% and said it could tighten further because of the risk inflation stalls above its 2% target.

Canada's employment data for July, due on Friday, could help guide expectations for additional hikes.

(For other stories from the August Reuters foreign exchange poll:)

(Reporting by Fergal Smith; Polling by Sujith Pai, Veronica Khongwir and Vijayalakshmi Srinivasan; Editing by Andrew Cawthorne)