The Bank of Canada policy continues to pressure the Canadian dollar lower just as the Fed is set to raise U.S. rates.
However, the real lethal cocktail is the mix of the loonie and lower oil prices.
Oil inventories are gushing as storage overflows and inventory is dumped on the market, with U.S. producers continuing to pump at record levels.
Meanwhile, the loonie has dropped almost two cents since Valentine’s Day.
This has put the Saudis in a tight spot: they want to continue to cut production to protect prices, as the U.S. grabs market share as U.S. shale producers turn the faucet on full blast.
The likely outcome? A Canadian dollar that could head down towards 71 cents and oil prices, according to one major analyst, that could again break down below $40 per barrel.