The Canadian dollar is the weakest major currency this morning, down over 1% from Friday. USD to CAD is currently trading at 1.275 (CAD to USD is at 0.748). The loonie has now lost 6% since the beginning of June, meaning that the Canadian currency has given up all of its earlier 2021 gains. This morning’s notable move comes amidst a global sell-off in “risk assets”, including as a decline of 1.5% in equities. The risk-off mood and consequent rush into safe-have assets like the US dollar is due largely due to worries about the spread of the delta variant denting expectations of a strong global economic recovery. In addition to the broad rally in the US dollar this morning, the Canadian dollar is being further pressured by a significant dip in oil prices resulting from agreement to increase supply at OPEC+. With little on the economic calendar today that could impact markets, and with corporate earnings largely coming in as expected, it is difficult to see what could turn around sentiment, and so we expect the softness in the Canadian dollar to hold for the day.
