One of the big headlines during an otherwise quiet morning in global markets today: the Canadian dollar has just fallen to $US1.10 per U.S. dollar for the first time since 2009.
Since the turn of the new year, the loonie has been sliding fast. In the year to date already, the U.S. dollar has risen 3.6% against Canada’s currency.
The Canadian economy faces significant headwinds at a time when many developed economies around the world are staging rebounds of their own, as evidenced by the latest release of official employment figures, which showed that the Canadian economy unexpectedly lost jobs in December.
“Canadians are starting to be convinced that the Bank of Canada will have an easing bias at its upcoming meeting on the 22nd of January, but little of this is yet priced in,” said Sebastien Galy, a senior forex strategist at Société Génerale, in a January 17 note, when the exchange rate was trading closer to $US1.095.
The chart below shows the move.