The Canadian dollar is weaker by 0.7% this morning. After the Fed press conference yesterday, attention has turned away from the positive impact of monetary stimulus on asset prices to the negative impact of the economic crisis which was the reason for the monetary stimulus in the first place. The Fed did not actually make any news in terms of rates or its QE programs. Instead, it was the cautious tone on the economy which received the most attention. As sentiment has turned more cautious, risk is out of favour and currencies like the loonie are declining. As has been the case in recent months most risk assets are moving in tandem, with equities oil down significantly as well.
