It is only Wednesday morning and it has already been a whirlwind week for the Canadian dollar. Monday saw stocks sell off very heavily on concerns about the spread of Covid variants. Oil also moved well off of its recent highs as OPEC+ members came to an agreement on a supply increase. Those factors were enough to push the loonie to near its lows for 2021. But since mid-morning on Tuesday, we have seen a turn around in sentiment. Stocks have recovered most of their losses and oil has partially rebounded. As a result, the Canadian dollar has also rebounded, and as of this morning, has erased most of the losses from earlier in the week. Still, it has been a tough couple of month for the Canadian currency. After peaking in June on the back of Bank of Canada hawkishness and a massive run up in commodity prices, CAD has lost 5% of its value against USD as the Fed moved to match the Bank of Canada and commodity prices have either come down (lumber) or stabilized (oil). USD to CAD is currently at 1.264 (CAD to USD is at 0.791).
