The Canadian dollar is weaker by 0.3% to and is now at a five day low as Ontario gets set to announce a two-week stay at home order later today. The impending announcement by the Canada’s largest province surprised some observers. This is the first time that a specific local action in response to the pandemic is moving the USD to CAD exchange rate and reflects the view that the longer the pandemic remains a drag on economic activity, the more likely that the Bank of Canada will continue to remain accommodative. The weakening in the Loonie comes despite release of data showing a trade surplus for a second month in a row in February and a PMI index which showed unexpected strength in the Ivey PMI Index in March. Oil prices are modestly weaker as negotiations seem to be on track for a renewed nuclear deal between the US and Iran.
