It's not news to see the loonie trading detached from energy prices, the chart below shows the 120-day correlation coefficient dropping since late 2023
This year, crude oil futures track double-digit gains while the Canadian dollar is down 3.3%. This has taken the 120-day correlation to the lowest level since mid-2014
We have previously noted USD/CAD trading in line with rate differentials. There's now a 75bps Fed-BoC policy rate spread, a 25bps widening will take the differential to the highest since 2007
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