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Economic Research

Canadian Dollar and Oil: No Longer So Close

Simon Derrick of Bank of New York highlights a striking disconnect between the Canadian dollar and crude oil futures, which only a few months ago seemed joined at the hip. Now oil is shooting to new nominal highs, and the Canadian dollar seems tied to parity.

While the Canadian dollar has long been a commodity currency, its relationship to oil seemed to grow ever closer last year, starting as Derrick noted as crude oil cascaded in late 2006, and moving up with oil and the euro against the US dollar until the Loonie peaked in November. Since retreating to parity, it has remained[...]

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