The Canadian Dollar’s correlation to Crude Oil Futures prices has hit near record-highs, as the export-dependent country’s currency has regained its sensitivity to energy costs. The 20-day correlation between the USD/CAD and the front-month NYMEX Crude Oil Futures price now stands at an impressive -0.65—variations in crude oil prices can explain approximately 40 percent of movements in the Canadian dollar. A jump in sensitivity underlines the notion that markets remain very strongly connected, and common factors may continue to move currencies and other key asset classes.
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