• Entertainment
  • Finance
  • Marketing
  • Real Estate
  • Technology
  • Social
National Journal Community Of e-Experts
Finance 0

Seasonality And Greenback/Loonie Cycles

By Kurt Osterberg · On April 18, 2018

The loonie has rebounded 2.7% against the greenback so far in April, leading some to predict that another up-cycle for commodities, Canadian equities and the C$ has begun. But, the loonie has climbed with oil prices in 8 of the last 10 Aprils, only to retrace again in the month thereafter.

The larger perspective, as shown in the below chart since 1994, from my partner Cory Venable, is that late in economic cycles when growth and revenues disappoint, the US dollar typically rallies, while oil and commodity-centric currencies weaken.

Not only is the global benchmark currency a relatively deep and liquid ‘safe haven’ in times of global financial strain, but the bulk of global debt (some $237 trillion today) is owed in US dollars.As US spending and imports fall, so does the inflow of US dollars to foreign exporters who need greenbacks to make their payments.This naturally prods them to buy more US dollars, and traders pile on for the ride.These factors compound rising U$ costs and shrinking free cash flow for foreign borrowers and exporters.

As noted below, the U$ does not typically top out against the C$ until the equity market ‘risk-off’ cycle has bottomed.

Despite 2018 seeing the most negative first quarter for stock markets since 1929, declines have been modest thus far.And unlike the last two, this contraction cycle has the added distinction for Canada of boasting some of the most over-valued realty and indebted households in the world, going in.

We suspect that the loonie is unlikely to have fathomed a durable cycle bottom just yet.

Print Friendly, PDF & Email

Share Tweet

Kurt Osterberg

You Might Also Like

  • Finance

    STEPN Sneaker NFTs Sell For $100, Previously Worth $1200

  • Finance

    NFT Prices in Free Fall – 5 NFT Collections to Start Buying Today

  • Finance

    5 NFTs Trending on Twitter Going Cheap to Invest in Now

No Comments

Leave a reply Cancel reply

Top Finance

  • 3 Best Large-Cap Blend Mutual Funds For Enticing Returns 3 Best Large-Cap Blend Mutual Funds For Enticing Returns
  • What is Value Chain Analysis? How to Deliver Value & Gain a Competitive Advantage What is Value Chain Analysis? How to Deliver Value & Gain a Competitive Advantage
  • Hedge Funds In The US Hedge Funds In The US
  • 5 Ridiculously Useful Non-Monetary Reward Examples that Improve Employee Engagement 5 Ridiculously Useful Non-Monetary Reward Examples that Improve Employee Engagement
  • Chart: Amazon’s Dominance In Ecommerce Chart: Amazon’s Dominance In Ecommerce

New Posts

  • STEPN Sneaker NFTs Sell For $100, Previously Worth $1200

    STEPN Sneaker NFTs Sell For $100, Previously Worth $1200

    June 20, 2022
  • NFT Prices in Free Fall – 5 NFT Collections to Start Buying Today

    NFT Prices in Free Fall – 5 NFT Collections to Start Buying Today

    June 20, 2022
  • 5 NFTs Trending on Twitter Going Cheap to Invest in Now

    5 NFTs Trending on Twitter Going Cheap to Invest in Now

    June 20, 2022
  • Bill Gates – ‘NFTs & Crypto Based on Greater Fool Theory’

    Bill Gates – ‘NFTs & Crypto Based on Greater Fool Theory’

    June 20, 2022
  • Actor Seth Green Pays $300,000 to Recover his Stolen BAYC NFT

    Actor Seth Green Pays $300,000 to Recover his Stolen BAYC NFT

    June 20, 2022
  • About
  • Contact Us
  • Privacy & Policy
  • Sitemap
  • Terms of use

Copyright © 2018-2021 NJCEE. All Rights Reserved.