The Canadian dollar is down over 1% as the US dollar shows material and broad strength. The emergence of a real possibility of the impeachment and/or removal of the President in the near future is injecting some uncertainty into the environment which favours the US dollar’s risk-haven status. The widening of US treasury yields is also contributing to the strength of the US dollar. That widening comes as the potential of a large stimulus package comes into focus with the Democrats in control of the Senate in a few weeks. The case for such fiscal stimulus increased on Friday as a result of the abysmal US jobs report. The markets are treating the likely fiscal stimulus as a replacement for Fed action. That is, the possibility of fiscal stimulus is seen as reducing the need for monetary action which is also pushing up the US dollar. Finally, oil is down over 1% this morning which is further pressuring the Canadian dollar against the US dollar. The Canadian dollar is now trading at the Interchange Financial Consensus short term forecast.
