The Canadian Dollar as a commodity currency tends to be more difficult to second guess. It rises and falls with oil prices and the commodity market as a whole. One of my colleagues Jonathan Watson pointed out how the relationship between the two has been tested by the recent wildfire in Canada which is still burning. Oil prices are rising as a result of the reduced supply in oil, but the Canadian Dollar is suffering as it is struggling to export during this crisis.
Today growth figures for the first quarter of 2016 will be released, alongside a closer look at how output manifested in March. This is one of the few data releases we get to see for Canada compared to the more voluminous sets for larger economies, and as such tend to have a significant sway on the Canadian Dollar’s value.
But I can’t help but question whether markets will take much heed to how much the economy grew between January and March, when any projections for the year were thrown out the window with the fires plaguing the country’s current output. Until the fire is finally put to rest, I expect buying rates for the Canadian Dollar to continue improving.