Loonie in tune with the market
MARKET VOICE
The Canadian dollar (CAD) has been closely tied to the general direction of commodity prices during its rise from 2002 lows below 0.6250. It will remain so. Even though the Bank of Canada signalled a shift to the sidelines in its latest Monetary Policy Report, and June core inflation tumbled to 1.7% y/y from 2.0% y/y, the outlook for the CAD has not fundamentally changed.
The Bank of Canada considers moves in the CAD based on developments in commodity markets as type 1, or fundamental moves. That
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