Tuesday, April 12, 2011

The Canadian Dollar - Apr 12th

The Canadian Dollar
A Picture (Chart) is Worth a Thousand Words
April 12th, 2011

Today’s discussion will more closely resemble a picture show than an essay.  The Bank of Canada decided this morning to leave its overnight rate unchanged at 1.00%, in line with expectations.  BOC Governor Mark Carney pointed at the strong Canadian dollar as a disinflationary force that will help keep rising prices subdued, saying “the persistent strength of the Canadian dollar could create even greater headwinds for the Canadian economy.”  It is undeniable that the Loonie has been very strong against the Greenback, the currency of our largest trading partner, however relative to our other trading partners it is more of a mixed bag. 

Canada’s Trading Partners

Canadian Exports
Courtesy of Stats Canada

Canadian Imports
Courtesy of Stats Canada

As the charts above show, the U.S. dominates Canada’s international trade; however it has been consistently losing ground to other countries.  Keep in mind that the ‘All Other’ category is primarily China.

Canadian Dollar vs. Our Trading Partners

CAD/USD – US dollar
Courtesy of Bloomberg

CAD/EUR – Euro
Courtesy of Bloomberg

CAD/GBP – British pound
Courtesy of Bloomberg

CAD/JPY – Japanese yen
Courtesy of Bloomberg

CAD/AUD – Australian dollar
Courtesy of Bloomberg

CAD/CHF – Swiss franc
Courtesy of Bloomberg

-Jaime Macrae, CIM
Account Executive, Friedberg Mercantile Group

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