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Oil and Economy Pull the Canadian Dollar Lower
Our informal and simple model for the Canadian dollar has three variables. Oil, interest rates, and general risk environment. Over time, the coefficient of the variables can and do change. Of the three variables, the general risk environment is the most supportive of the Canadian dollar. Between the BOJ and ECB more than $150 bln a month of central bank, credits are being created. This is one of the key factors driving interest rates down in Europe and Japan. Equity markets have generally recovered from the wobble after the UK referendum, but not necessarily because of stronger growth expectations. Rather lower bond ... (full story)