With the Bank of Canada shifting from dovish into neutral territory and oil prices breaking out, we’ve been bullish on the Canadian dollar since last week’s big breakdown in USD/CAD), but the Loonie has actually been showing strength against the other currencies for a couple of weeks now.
The dollar’s relationship with commodities was in full force last week. The sharp increase in the price of oil (up more than 10% since April 8) was in stark contrast to the dollar, which fell sharply against its G10 counterparts, as you can see in the chart below.
Canada has been next in line to feel the loss of imports into the United States. They’ve managed to up their supply to the United States over 3 million barrels per day and now we’re just casting them aside as we concentrate on keeping our production strong.