Stock Market

Story: Goldman Sees Canadian Dollar Rising on Energy Rally

By Bruce Buterin

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Energy Sector Drives Currency Gains. Energy makes up a huge chunk of Canada's GDP. More expensive oil means Canadian energy companies…

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Political and Corporate Reactions. Prime Minister Justin Trudeau's government keeps close tabs on currency moves.

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Goldman Sachs thinks the Canadian dollar wins big from surging energy prices. The Wall Street giant dropped its bullish call Monday, betting that oil's climb will push the loonie…

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Oil just can't stop climbing. Brent crude smashed through $85 last week, and Goldman's traders see more upside ahead.

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Energy makes up a huge chunk of Canada's GDP. More expensive oil means Canadian energy companies rake in bigger profits. That cash flow boost tends to lift the whole currency.

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The investment bank told clients it expects USD/CAD to drop from today's 1.30 level down to 1.25 over the next few months. That's a decent move for currency markets.

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Goldman also watches the Bank of Canada for rate hikes. Higher rates usually help a currency.

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Prime Minister Justin Trudeau's government keeps close tabs on currency moves. Finance Minister Chrystia Freeland said April 1 she feels good about Canada's economic resilience,…

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Canadian energy giants are cashing in. Suncor Energy and Canadian Natural Resources both reported fatter revenues as oil prices climbed.

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Not everyone's convinced the rally lasts. CIBC economists warn the currency's strength could crack if energy prices tank unexpectedly.

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Enbridge announced a major pipeline expansion to handle more oil flow. The project wraps up by end of 2026 and should significantly boost transportation capacity.

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Statistics Canada drops trade balance data April 10. TD Securities analysts think a strong trade surplus will reinforce the Canadian dollar's position in forex markets.

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Macklem gave a speech April 5 about the Bank of Canada's inflation targets. He hinted at possible rate adjustments if price pressures persist.

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Suncor CEO Rich Kruger outlined efficiency plans at an April 2 shareholder meeting. The company wants to invest in new tech to cut production costs.

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Goldman's call faces real risks though. Global energy demand could shift fast. Geopolitical tensions mess with oil supply chains regularly.

The Currency Analytics

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