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The CIBC Research Team point out that the Canadian dollar is at the highest level of the year against a basket of currencies, excluding the US dollar and that could be problematic for the overall trade position.  

Key Quotes:  

“Concerns regarding global growth and EM risk, resulting in a broadly stronger US$ and lower oil prices, have seen the loonie weaken against the greenback. However, with sterling, the euro and yuan performing particularly poorly recently, the C$ [CAD] is at its highest level since the start of the year against a basket of other currencies.”

“Not too problematic you may assume, given the majority of exports are destined to the US. However, looking at movements in trade positions against the US and rest of world suggests otherwise, with the RoW responsible for weaker overall performance relative to the years before oil’s slump.”

“While the C$ may continue to outperform in the near term as we get closer to an October BoC rate hike, it could be an underperformer come 2019 as trade deficits with the rest of the world weigh.”