The USD index (DXY) is now at its lowest levels in nearly two years, indicating broad weakness in the US dollar. USD weakness is the key theme of the currency markets in the last several weeks. For its part, the Canadian dollar is now consistently trading right around the highest levels it has traded since the beginning of the crisis in early March but given overall USD weakness, the Loonie strength is actually not that impressive relative to other currencies. There is also increasing attention being paid to the rally in gold which is trading at record levels. The Loonie has sometimes shown correlation to precious metal prices and as the gold rally continues USDCAD traders will pay increasing attention to that market. Oil and equities are flat this morning and the loonie is slightly up against the USD relative to Friday’s close.
