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Sheets of U.S. one dollar bills roll off the press at the Bureau of Printing and Engraving in Washington, D.C.
Sheets of U.S. one dollar bills roll off the press at the Bureau of Printing and Engraving in Washington, D.C.
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Rising greenback threatens Canadian stocks

Scott Barlow

 — The Globe and Mail

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Last updated

The recent strength of the U.S. dollar provides a warning sign for investors in Canadian stocks – although it may also signal a stronger Canadian economy in the months ahead.

The S&P/TSX composite index has historically moved in the opposite direction to the U.S. Trade Weighted Dollar Index (DXY). This reflects the Canadian benchmark’s high exposure to resource stocks – when the U.S. currency rises, commodity prices fall, and so do Canadian stocks.