Loonie (CAD) Approaching Parity!
In the global economic landscape, the Canadian dollar or “Loonie”(CAD) often gets forgotten. However, things up north of the border are starting to look positive for the Loonie. Yesterday, Canadian GDP figures came in better than expected showing a YoY gain of 3% vs. an expected 2.7%. The monthly figure for September was lower than expected, but this largely positive news.
In addition, the Canadian dollar is closely linked to the price of oil, which has been experiencing good gains of late thanks to US dollar weakness and inflation expectations. Also to consider is the seasonal nature of oil prices as we head into the winter season.
Yesterday’s coordinated Central bank action essentially released liquidity into the market causing the US dollar to weaken. Recent economic data in the US has been positive, which is good for Canadian exports. So the tailwinds are behind the Loonie and we are looking toward the Non-Farm Payrolls report here in the US tomorrow and expect the Loonie to reach parity.