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‘Steer clear’ of the Canadian dollar, Société Générale says
business briefing
Michael Babad

This article was published more than 7 years ago. Some information may no longer be current.

Briefing highlights

  • ‘Steer clear’ of the loonie: Société Générale
  • Canada churns out 54,000 new jobs
  • Canadian trade balance rebounds to surplus
  • Can Saudis afford both guns and butter?

‘Nervous’ of loonie

The Canadian dollar is up a bit in the wake of two strong economic reports, but that doesn’t suggest the outlook for the loonie has changed.

Indeed, a major global bank said just this week that it’s “nervous” about the Canadian currency, and that maybe investors should stay away from it at

The loonie bounced to as high as 75.85 cents (U.S.) after Statistics Canada released a strong December jobs report, which showed a gain of 54,000 jobs, and a separate look at the country’s trade balance, which rebounded to a surplus for the first time since September, 2014.

“Strong Canadian employment and trade figures that crushed consensus expectations are why the Canadian dollar is holding its own rather nicely against the USD this morning despite a strong greenback,” said Derek Holt of Bank of Nova Scotia, referring to the U.S. currency by its symbol.

But if you look further out, most forecasters still expect the loonie to slide, generally to somewhere between 72 and 74 cents, though some see it below the 70-cent mark.

Largely this is because of the divergence in the interest rate paths of the Canadian and U.S. central banks, with the former on hold and the latter in th