This chart of the Canadian dollar (CDW in red) and the Canadian stock market (TSX in blue) since 1997 captures the historically tight correlation between the country’s petro-currency and stock market. There was a brief disconnect in 2000, when the loonie began to swoon at the start of the year and the broad market rallied into September on blind love for dividend paying shares like the banks and pipelines, along with misguided faith and creative accounting at Nortel. Nortel went bust of course, and the dividend paying stocks crashed more than 40% in 2001-03, and again in 2007-09.
Cory’s Chart Corner
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