The Canadian dollar has been the weakest performer of the G10 currencies in the seven weeks since the Bank of Canada last raised interest rates, and some strategists predict more declines in value after the central bank on Wednesday dialed back expectations for more interest rate increases this year.
The loonie posted a more than two-year high near at C$1.2063 to the greenback, or 82.90 U.S. cents, in September as expectations for additional rate hikes prompted investors to build bullish bets on the currency to their highest in five years. Those positions may now become unprofitable.
“We are seeing speculators run for cover,†said Scott Smith, managing partner at Viewpoint Investment Partners. “We’ve seen expectations for future rate hikes walked back.â€
Perceived chances of another hike by the end of the year have fallen to 25 percent from nearly 100 percent before a speech last month by Governor Stephen Poloz, which signaled the central bank had become more concerned about the currency.
That reduction in rate hike expectations has led to a loss of the yield advantage that the Canadian dollar had over its U.S. counterpart since September.
The two-year spread, which peaked in September at 25 basis points, has slumped to -17 basis points.
That unfavorable gap in yields helped push the loonie to a three-month low of C$1.2916 on Friday, taking it full circle to where it was before the Bank of Canada hiked in July for the first time in nearly seven years.
“A smoother path and a bit more communication (from the Bank of Canada) may have avoided some of the unwanted volatility in the Canadian dollar,†said Shaun Osborne, chief currency strategist at Scotiabank. (Reporting by Fergal Smith; Editing by Steve Orlofsky).
Why are we last place and not getting our shit together.
Its easy Gov Jobs and Mc Donald's and Starbucks and Call centre are Jobs but really you don't buy million dollar homes with these jobs. Unless 20 live in the house. Thats a whole other topic.
Jt Is taxing us to death and going after every one who works or is sick for money.
He Hands out money to foreign countries like its Candy at halloween.
His finance minister is a crooked as a Home Depot 2x4 in the Scrap bin.
He is in favour of Useless Carbon tax that adds shit all to Canada actually hurts us yet on it goes.
He kills our oil industry and is in favour of importing oil from Third world dictators with no Human rights or Cares how its produced.
Pipelines are bad in Trudeaus world, why not dump pure shit into the rivers thats ok but clean good oil produced at home is bad.
Nafta now that is the next big joke that he will destroy our economy with. Lets negotiate trade but go their with Fairy dust ideas of equality etc in the draft document.
Its trade moron.
What a genius we Elected! Can the election come soon enough before we move to a third world country.
The loonie posted a more than two-year high near at C$1.2063 to the greenback, or 82.90 U.S. cents, in September as expectations for additional rate hikes prompted investors to build bullish bets on the currency to their highest in five years. Those positions may now become unprofitable.
“We are seeing speculators run for cover,†said Scott Smith, managing partner at Viewpoint Investment Partners. “We’ve seen expectations for future rate hikes walked back.â€
Perceived chances of another hike by the end of the year have fallen to 25 percent from nearly 100 percent before a speech last month by Governor Stephen Poloz, which signaled the central bank had become more concerned about the currency.
That reduction in rate hike expectations has led to a loss of the yield advantage that the Canadian dollar had over its U.S. counterpart since September.
The two-year spread, which peaked in September at 25 basis points, has slumped to -17 basis points.
That unfavorable gap in yields helped push the loonie to a three-month low of C$1.2916 on Friday, taking it full circle to where it was before the Bank of Canada hiked in July for the first time in nearly seven years.
“A smoother path and a bit more communication (from the Bank of Canada) may have avoided some of the unwanted volatility in the Canadian dollar,†said Shaun Osborne, chief currency strategist at Scotiabank. (Reporting by Fergal Smith; Editing by Steve Orlofsky).
Why are we last place and not getting our shit together.
Its easy Gov Jobs and Mc Donald's and Starbucks and Call centre are Jobs but really you don't buy million dollar homes with these jobs. Unless 20 live in the house. Thats a whole other topic.
Jt Is taxing us to death and going after every one who works or is sick for money.
He Hands out money to foreign countries like its Candy at halloween.
His finance minister is a crooked as a Home Depot 2x4 in the Scrap bin.
He is in favour of Useless Carbon tax that adds shit all to Canada actually hurts us yet on it goes.
He kills our oil industry and is in favour of importing oil from Third world dictators with no Human rights or Cares how its produced.
Pipelines are bad in Trudeaus world, why not dump pure shit into the rivers thats ok but clean good oil produced at home is bad.
Nafta now that is the next big joke that he will destroy our economy with. Lets negotiate trade but go their with Fairy dust ideas of equality etc in the draft document.
Its trade moron.
What a genius we Elected! Can the election come soon enough before we move to a third world country.
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