This clip offers a good review of the close linkages between non-exchange traded commodities (driven more by global demand than financial market speculation), the Canadian dollar and the North American economy.
Lakshman Achuthan, COO of the Economic Cycle Research Institute, discusses risks of a global economic slowdown and its impact on commodities demand from Canada. Here is a direct video link.
Also see ECRI’s article Industrial Commodities and the Canadian Loonie and their chart showing that non-exchange-traded commodity price growth tends to lead the USD/CAD exchange rate, suggesting the CAD will remain under pressure for the forseeable future:
“This is because non-speculative industrial commodity price inflation is related to the value of the Canadian dollar, which is perceived to be a “commodity currency.”
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