Slumping Loonie
The National Bank of Canada | Apr 04, 2017 08:48AM ET
On a Monday with little in the way of news, pressure remained strong on the loonie, driving it down close to 0.5% in trading. Traders looking for a reason for the downturn have concluded that the purchase of assets from U.S. oil company Conoco Phillips by Canadian firm Cenovus Energy could be partially behind the move. Cenovus will have to come up with close to $10.6 billion in U.S. dollars to complete the transaction scheduled for late June.
The Bank of Canada’s Business Outlook Survey (spring 2017) published yesterday confirms that businesses expect an increase in sales, while exports continue to support the outlook, despite uncertainty surrounding protectionist policies. Moreover, the report shows that after two sluggish years, companies’ intentions to boost their investments are more widespread.
This morning, we’ll be keeping an eye on Canadian Trade Balance data for February, which should be enhanced by the increase in commodity prices and gains in exports. Markets are fragile this morning and investors are turning to the yen and the U.S. dollar as safe havens, with both currencies rising.
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