Today the Canadian dollar reached parity with the US dollar for the first time since June 2008. Back then, oil (one of Canada's primary exports) was circa $140/barrel. As has been the case for all currencies, it has been a pretty wild ride since then. In response to this development, Reuters ran a story on the Canadian dollar's rise today. After an overview of the more conventional causes of the Canadian dollar's rise - expectations of divergence with American monetary policy and strengthening commodity prices - the article identified Friday's US payrolls number as the most recent driver of the Canadian dollar's rise, on the basis that this was a sign of strength in Canada's largest trading partner.
I could understand how this might strengthen the Canadian dollar versus a 3rd country's currency, but using improving American fundamentals to rationalize the bullish moves in CAD/USD is nothing less than a failure of financial journalism.
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