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Loonie’s worst days are likely over

The Canadian dollar has taken a hellacious beating in the past fifteen months, falling 10 per cent from a 2012 high of $1.03 (U.S.). How low can it go? Two measures roughly corresponding to market value and fundamental value suggest that the bulk of the damage is behind us.

Global investors view the loonie as a commodity-based, hard asset currency. They often take their trading cues from materials stocks and the Canadian dollar has generally followed the course of the S&P/TSX Materials Index.