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Loonie's fate hooked to global stocks with Bank of Canada neutralized
A catalyst is emerging for the Canadian dollar that is gnawing at the central bank’s influence and potentially its monetary policy: the performance of global equities. The loonie has traditionally been seen as a commodity-linked currency because of the country’s vast natural resources. But trillions of dollars of stimulus, along with interest rate cuts from the Bank of Canada, the Federal Reserve and other central banks have realigned those forces. The one-year rolling correlation of the dollar-loonie to world equities is stronger than the pair’s relationship with base metals, crude oil and yield differentials, ... (full story)