The Canadian dollar is the worst performing major currency over the past month. It has lost nearly 4.5% against the US dollar. That brings its year-to-date loss to almost 12%. There had been two main sources of pressure on the Canadian dollar. The drop in oil prices, which poses a negative terms of trade shock on the economy. While under normal conditions, we typically emphasize factors that impact the capital markets over the goods markets when assessing the outlook for a major currency. This is especially true of a reserve currency. However, the magnitude of the decline in oil prices, and the fact that various ... (full story)