Canadian Securities In Demand
The National Bank of Canada | Feb 20, 2017 08:49AM ET
In a context in which U.S. yields have risen substantially more than Canadian yields, many observers are looking anywhere for a reason explaining the surprising resilience of the Canadian dollar against the U.S. dollar.
Among the important factors to consider:
• Rising prices for certain commodities such as copper and oil (WTI)
• Continued U.S. economic growth
• Prime Minister Trudeau’s visit to Washington, which helped to soothe fears related to the renegotiation of trade agreements between Canada and the United States for the time being
Last Friday, Statistics Canada gave us another concrete explanation: in 2016, purchases of Canadian securities by foreigners reached a record $161 billion. Such high demand can certainly contribute to the strength of our loonie, at least in the short term. However, our economists have taken care to point out that such a situation can prove highly temporary, as the direction of foreign investments can change very quickly.
No major indicators are on tap today in North America, with many Canadian provinces celebrating the Family Day holiday while it is Presidents’ Day south of the border. Have
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