Finance News
By Jean-Luc Maracon
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What happened. The loonie moved higher. Not by much — but enough to get traders talking.
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The historical context. It's happened before. More than once. Back in December 2015, when the Fed moved to hike rates for…
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Why it matters. A stronger Canadian dollar cuts two ways, and which side you're on depends entirely on what your…
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What to watch. 1. The Federal Reserve's upcoming interest rate decision — a rate hike would likely push the…
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The loonie moved higher. Not by much — but enough to get traders talking. The Canadian dollar posted a modest gain as markets locked in on the Federal Reserve's next interest…
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The move is slight, but the context around it isn't. Fed rate decisions carry enormous weight for currency markets globally, and the Canadian dollar sits in an unusually exposed…
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Markets are basically holding their breath right now.
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It's happened before. More than once. Back in December 2015, when the Fed moved to hike rates for the first time in nearly a decade, currency markets worldwide shifted in…
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Then came 2018. The Fed ran a series of rate increases that year, and the loonie vacillated through each one.
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That sensitivity hasn't gone away. If anything, it's probably sharper now, given how globally integrated financial markets have become.
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Related: Fed Rate Call and FTXs 900 Million Dollar Payout Put Crypto on Edge
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For Canadian exporters, this is bad news — or at least uncomfortable news. A rising loonie makes Canadian goods more expensive for foreign buyers. Competitiveness erodes.
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Importers see it differently. Stronger loonie means more purchasing power. Goods coming into Canada get cheaper, which can ease costs for businesses and potentially lower prices…
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And then there's the bigger picture. The Fed's decision — whatever it turns out to be — could set a tone that other central banks feel pressure to respond to. Rate policy in the U.
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1. The Federal Reserve's upcoming interest rate decision — a rate hike would likely push the Canadian dollar lower, reversing the current modest gains.
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