
The Canadian dollar has proven especially sensitive to movements in broader commodity markets, and indeed we see that the USDCAD’s correlation with the Reuters/Jefferies CRB Commodity Index is near its strongest levels in at least 10 years.

Thus whether or not the Canadian dollar may recover from its recent tumbles may largely depend on whether commodities can bounce from recent lows. Even gold—typically seen as a safe-haven store of value—has fallen substantially on a clear de-leveraging across global financial asset classes.
Written by David Rodríguez, Quantitative Analyst for DailyFX.com
To contact the author of this report, e-mail drodriguez@dailyfx.com