The Canadian dollar on Monday slumped to a new closing low for 2026 of 71.67 cents U.S., with economists at National Bank of Canada singling out gold as “a key factor” behind the loonie’s weakness.
“The loonie has been the weakest reserve currency in recent weeks,” chief economist Stefane Marion and senior economist Kyle Dahms said in a report, referring to a group of currencies that include the United States dollar, euro and Japanese yen, among others.
They said one reason behind the Canadian dollar’s poor showing is that it now has a stronger relationship with the price of gold than the price of oil, which is a change from when the loonie and oil moved more in tandem during the previous oil shock of 2022 after Russia attacked Ukraine.
Marion and Dahms said there are several other factors pushing down the Canadian dollar, including “deteriorating” economic growth and “unfavourable” interest rate spreads between two-year Government of Canada and U.S. Treasury yields.
Upvote
2
