Skip to main content

‘My jaw hit the desk’: A Canadian currency trader’s wild morning

Lennon Sweeting, corporate dealer at CanadianForex

Lennon Sweeting, corporate dealer at CanadianForex

Currency trading is never for the faint of heart. But Wednesday spelled a particularly hair-raising day in foreign-exchange markets.

"My jaw hit the desk," says Lennon Sweeting, corporate dealer at CanadianForex, of the Bank of Canada's surprise rate cut.

The Canadian dollar plunged by more than a cent moments after the central bank announced it would cut its key rate by 25 basis points. By noon, it had weakened further, to a near six-year low at below 81 cents.

Story continues below advertisement

It all began as a relatively calm day – cappuccino in hand, Mr. Sweeting arrived at his Toronto office at 7:15 am. He works on risk management at the global currency broker and executes foreign-exchange trades for North American corporate customers. He caught up on the overnight news, wrote commentary for clients and went to a meeting.

The phones had stopped ringing and things quieted down just before the central bank announcement. On the desk, much attention was instead focused on the European Central Bank meeting. No one anticipated a Canadian rate cut.

Then, at 10 a.m. ET, pandemonium hit. Notifications popped up from liquidity providers, alerts flashed on the Bloomberg terminals and the loonie tanked.

"It definitely took our whole floor by surprise," he says, adding that "some of us have a little egg on our face" when it comes to what strategies they had been providing to customers.

Within moments, Mr. Sweeting and colleagues were notifying corporate clients of the decision, what the currency's move meant to them (positive or negative, "depending on what side of the fence they sit on") and what next strategies might be.

"For any exporters here in Canada, this is obviously a big development that's going to affect their business tremendously, so time is of the essence," he says, adding that "I received a few phone calls that had maybe some explicit language. People were very shocked."

He has been in the business for six years and spent the rest of the day executing trades on behalf of his corporate customers and managing their positions.

Story continues below advertisement

"Some are sellers who are wanting to take advantage and capture the opportunity here. Some are margin calls for customers who have forward contracts or hedging products that are meant to provide stability for them in terms of their receivables, etc. But unfortunately with a big move like this, we would have to margin call some of those positions and kind of top up deposits."

He was not alone in the scramble though. Not a single economist of the 22 surveyed by Bloomberg News expected Wednesday's rate cut, the first reduction in nearly six years.

"The shocking immediate [currency move] in the space of seconds speaks volumes as to the violence of the reaction," said chief currency strategist Camilla Sutton of Bank of Nova Scotia.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter