The Canadian dollar is little changed from yesterday and is now hovering in the middle of its August trading range. USD to CAD is at 1.252 (CAD to USD at 0.798). Equity prices are also largely unchanged from yesterday, though for the most part stock indices continue to trade at near record levels. Oil is also stable but still well below its recent highs from earlier in August. Fears of runaway inflation have somewhat subsided after yesterday’s July US inflation figure came in as expected. More broadly, where we are is that economies on both sides of the border are generally chugging along the expected growth path but that challenges to a full recovery remain as evidenced by some recent mixed economic data. In addition, concerns about the Delta variant impeding global growth also continue to impact some asset prices (example: oil sell-off earlier in August). Nonetheless, the economic picture is dominated by the massive monetary stimulus that continues to come from central banks and for the foreseeable future exchange rates will be most sensitive to changes in perception about how quickly that stimulus is likely to end on either side of the border.
