Shifting dollar sentiment and what really drives US-Canada FX?
By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group
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US-Canada FX Gyrates With Commodities, Pandemic
- Traditional economic data doesn’t fully explain CAD/USD fluctuations.
- Both nations have many economic similarities such as low, stable inflation.
- Canadian dollar has closely tracked commodity prices for two decades.
- Quantitative easing, pace of reopening economy have bolstered CAD.
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Shifting Sentiment Weakens US Dollar
- US post-pandemic growth prospects lag many other nations.
- Europe has coordinated fiscal plan, China’s economy recovering.
- Will US recovery show signs of a bounce-back in Q3 2020?
- US might face headwinds in 2021 from mortgages, student loans.
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