Briefing highlights
- Can’t win for losing
- Markets at a glance
- BlackBerry posts quarterly profit
- Bank of England holds rates
- Husky Energy trims spending
- Altria buys into Juul
<b>Can’t win for losing</b>
— The Phrase Finder
Example: You’re driving south for the holiday break, as many Canadians do. You have more in your wallet, thanks to lower costs at the gas pump, but the Canadian dollar is at death’s door.
All of which means that what Mobil giveth when you cross the border, somebody else taketh away when you convert your loonies to pay.
Statistics Canada reported Wednesday that gas prices eased by 5.4 per cent in November from a year earlier. That, the federal agency said, came “as declining global crude oil prices led to lower prices at the pump and the first 12-month decrease in the gasoline index since June, 2017.”
A notable decline, that, and something we’ve all seen recently when we fill up.
Or, as economists noted, consumers are gaining as Alberta suffers low oil prices.
Having said that, Western Canadian prices are up, and their discount to West Texas intermediate and Brent, the global oil benchmarks, has narrowed substantially since Alberta Premier Rachel Notley ordered production cuts to help buoy prices.
“The bad news, of course, is that the discount applies to world prices that are sinking like a stone … along with the loonie,” said Bank of Montreal senior economist Sal Guatieri.
“It’s no coincidence that the last time the currency flirted with 74 cents US (C$1.35), WTI was near current levels.”
The Canadian dollar and oil
CAD/USD (left scale)
WTI (US$ per barrel, right scale)
$150
$1.1
1.0
100
0.9
0.8
50
0.7
0.6
0
0.5
2001
2005
2009
2013
2017
THE GLOBE AND MAIL, SOURCE: BLOOMBERG
The Canadian dollar and oil
CAD/USD (left scale)
WTI (US$ per barrel, right scale)
$150
$1.1
1.0
100
0.9
0.8
50
0.7
0.6
0
0.5
2001
2005
2009
2013
2017
THE GLOBE AND MAIL, SOURCE: BLOOMBERG
The Canadian dollar and oil
CAD/USD (left scale)
WTI (US$ per barrel, right scale)
$150
$1.1
1.0
100
0.9
0.8
50
0.7
0.6
0
0.5
2001
2005
2009
2013
2017
THE GLOBE AND MAIL, SOURCE: BLOOMBERG
The loonie slipped to just above 74 US cents Wednesday, and today is still below 74.5 US cents.
WTI, the U.S benchmark, has dropped about 40 per cent from its recent peaks. And it gets interesting here, noted Mark McCormick, North American head of foreign exchange strategy at TD Securities, because lower crude prices “are more likely to hinder [the loonie] than higher prices would help it.”
In its latest forecast, just yesterday, CIBC World Markets projected the loonie would perk up to just below 77 US cents in the first quarter of 2019 before falling back to about 74.5 by the end of next year.
Read more
- If you’re still alive in 2037, the loonie could still be worth just 75¢
- Hoser losers: Everyone’s dissing the Toronto stock market and Canadian dollar
- David Rosenberg’s ‘10 reasons to hate the loonie’ (and some from JPMorgan, but only into 2019)
- Still loonie after all these years: Canadian dollar will still be impaired two years from now, CIBC says