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Canadian Dollar: Weekly Report

Updated: Jan 21, 2023

Currency Movements | A huge week for the Canadian dollar this week. The Loonie made swell gains against the USD, finishing the week at 1.2278 (+1.80%). The CAD smashed through pre-pandemic strength, sitting now at its strongest level since April 2015!

A combination of dollar weakness, local economic data and oil prices slingshotted the CAD sky high! Firstly, retail sales increased by 4.8% month-over-month in February, with annual growth at 6.0% year-over-year. On the oil front, the West Texas Intermediate oil rose to $65.01/barrel, increasing by 33% since the end of 2020.

The oil price action is supported by expectations that the U.S. fiscal stimulus will drive a global economic boom, which will increase oil demand. The positive progress of the vaccine implementation in developed economies also collaborates to confirm this outlook.

Get Hedged! | Over the past 12 months, the USD|CAD pair has seen annual volatility at 6.70%, as seen on Deaglo’s spot history chat below. If your fund is interested in raising capital in a foreign jurisdiction, implementing a Foreign Share Class Hedging solution can lower volatility to 2.02%. In turn, this will boost returns, attract more foreign investors, and cut down on collateral drag.

Macroeconomic Data Front |

  • February’s GDP MoM was released today, which saw a small dip to 0.4% from 0.7% the month prior.

  • February’s Average Weekly Earnings YoY (gross taxable payroll divided by total employees) was posted on Thursday 29th April. The rate came in at 9% which reflects a decent wage growth for the period - its highest since June 2020.

  • February’s Retail Sales MoM was posted on Wednesday 28th April at 4.8%. A strong improvement from the previous 7 months which averaged a growth rate of -0.08%.

Next Week’s Data |

  • April’s Markit Manufacturing PMI (due 03 MAY)

  • March’s Balance of Trade (due 04 MAY)

  • March’s Building Permits MoM (due 04 MAY)

  • April’s Unemployment Rate (due 07 MAY)

Cross Border Banking | For anyone facing a cross-border transaction, whether that be purchasing a house overseas or acquiring a multi-million dollar company denominated in a foreign currency, Deaglo offers a solution far cheaper than the bank. We operate in over 140 currencies, charge $0 on accounts opening/maintenance, and are fully regulated. On a typical client transaction, we can offer up to 50% savings on the FX. Read more here.

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