The Canadian dollar is down 0.2% this morning after gaining 0.8% yesterday. Those moves represent the settling down of the USD to CAD exchange rate and pale in comparison to the large leg up in USD at the end of last week. The greenback has gained sharply since the US Federal Reserve indicated sooner-than-expected interest rate hikes last week. The Canadian dollar is now roughly 3 pennies lower than it was prior to the Fed’s hawkish tilt. This is despite the fact that oil is once again at multi-year highs and stock indices are trading near record levels. Fed Chairman Powell will testify before Congress today and what he has to say could easily move the markets given the general jitteriness about Fed intentions at the moment. It should be noted that the sell-off in cryptocurrencies is accelerating and while that market is ordinarily too small to have a contagion effect, if in fact we see a crash in crytpos, we could see a modest decline in risk assets like stocks and the Canadian dollar.
