The Canadian dollar, nicknamed the loonie, has leapt to a two-year high around $1.21 against its US counterpart. The Federal Reserve's pace of interest-rate rises is now likely to be slower than initially assumed, while the robust Canadian economy has prompted the Bank of Canada to bring forward its rate hikes. Last week it nudged the benchmark rate up from 0.75% to 1%. GDP growth has hit an annual pace of 4%, notes Theophilos Argitis on Bloomberg. Household spending has reached a nine-year high thanks to a healthy labour market and rising houseprices.
Viewpoint
"Current [US market] psychology cannot be described as euphoric' Most people seem aware that the good times won't roll on forever. Since there hasn't been an economic boom in this recovery, there doesn't have to be a major bust. Leverage at the banks is a fraction of the levels reached in 2007, and it was those levels that gave rise to the meltdowns Importantly, sub-prime mortgages and sub-prime-based mortgage-backed securities were the key ingredient whose failure directly caused the global financial crisis, and I see no analogue to them today, either in magnitude or degree of dubiousness. It's time for caution... not a full-scale exodus."
Howard Marks, Oaktree Capital
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Chart of the week: Norway’s crown has slippedCharts The Norwegian krone has slipped to a record low of more than ten to the euro.
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Chart of the week: sterling’s sea of troublesCharts Sterling slipped to a two-year low against the greenback this week, and remains around 12% below its pre-referendum level.
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Chart of the week: the pound’s post-war swan diveCharts The pound hit a new 20-month low against the dollar this week as Prime Minister Theresa May postponed the Brexit vote.
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Chart of the week: The Mexican peso has peakedCharts The Mexican peso has gained 8% against the dollar this year. But that's as far as it is likely to go.
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Chart of the week: government splits rock the randCharts The South African rand slipped by almost 3% last week, its worst five-day showing since August amid worries that President Jacob Zuma may be set to sack his competent and economically literate deputy Cyril Ramaphosa.
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Chart of the week: Thai baht defies gravityCharts Tourism is booming, the current account is in surplus, and the yield on local assets is enticing. No wonder the Thai baht has risen by 8% against the US dollar this year.
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Chart of the week: vote for authoritarianism will crush the Turkish liraCharts The Turkish lira has fallen as Erdogan’s authoritarian tendencies have unsettled foreign investors. It is at near record lows against the US dollar, and is unlikely to rebound any time soon.
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Chart of the week: a pause in the peso’s declineCharts The Mexican peso has bounced by around 5% from record lows against the US dollar in the past few days. But it has still lost 12% in a year.
