{"id":20142,"date":"2022-03-29T11:00:27","date_gmt":"2022-03-29T11:00:27","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2022\/03\/29\/loonies-push-past-80-cents-may-have-legs-analysts-say-but-commodity-prices-arent-the-driving-factor\/"},"modified":"2022-03-29T11:00:27","modified_gmt":"2022-03-29T11:00:27","slug":"loonies-push-past-80-cents-may-have-legs-analysts-say-but-commodity-prices-arent-the-driving-factor","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2022\/03\/29\/loonies-push-past-80-cents-may-have-legs-analysts-say-but-commodity-prices-arent-the-driving-factor\/","title":{"rendered":"Loonie&#8217;s push past 80 cents may have legs, analysts say, but commodity prices aren&#8217;t the driving factor"},"content":{"rendered":"<div style=\"text-align:center\"><\/div><p> \n<\/p>\n<div id=\"\">\n<nav aria-label=\"Breadcrumb\" class=\"breadcrumbs\">\n<h2 class=\"visually-hidden\">Breadcrumb Trail Links<\/h2>\n<ol class=\"breadcrumbs__items list-unstyled\">\n<li class=\"breadcrumbs__item\"> News <\/li>\n<li class=\"breadcrumbs__item\"> FP Finance <\/li>\n<li class=\"breadcrumbs__item\"> FP Economy <\/li>\n<\/ol>\n<\/nav>\n<p class=\"article-subtitle\"> Analysts predict that an improving economic backdrop and hawkish central bank mean there is more strength ahead for the Canadian dollar <\/p>\n<figure class=\"featured-image\"><picture class=\"featured-image__ratio\"><\/picture><figcaption class=\"featured-image__caption image-caption\"><span class=\"caption\">The loonie closed Monday just shy of the 80-cent mark, falling nearly half a per cent.<\/span> <span class=\"credit\">Photo by THE CANADIAN PRESS\/Paul Chiasson files<\/span> <\/figcaption><\/figure>\n<\/div>\n<div id=\"\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<div>\n<p>The Canadian dollar topped 80 cents against the greenback over the weekend for the first time since January, with analysts predicting that an improving economic backdrop and hawkish central bank mean there is more strength ahead, despite a pullback on Monday.<\/p>\n<p>Karl Schamotta, chief market strategist at\u00a0Corpay in Toronto, told the Financial Post that a number of factors have been driving the loonie higher in recent weeks, including the ebbing of a safe haven play that saw a rush to the U.S. dollar after Russia invaded Ukraine.<\/p>\n<p>Schamotta added that while the commodities rally and strength in crude oil prices are playing a supporting role, the Bank of Canada\u2019s hawkish messaging has been the star of the sustained rally.<\/p>\n<p>\u201c(Bond) yields are really doing the heavy lifting right now,\u201d Schamotta said in an interview. \u201cSo, Friday, deputy Governor Sharon Kozicki really emulated her counterparts at the Fed, and she hinted at bigger rate increases to come and I think this is really, really key.\u201d<\/p>\n<p>Kozicki\u2019s March 25 speech at the Federal Reserve Bank of San Francisco left many\u00a0market watchers expecting\u00a0a more aggressive rate-hike path, bringing bond yields up and pulling the Canadian dollar past the 80-cent threshold.<\/p>\n<\/p><\/div><\/div>\n<div id=\"\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<figure class=\"embedded-image\"><picture class=\"embedded-image__ratio\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"Bank of Canada deputy Governor Sharon Kozicki.\" class=\"embedded-image__image lazyload\" fifu-data-src=\"https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288&ssl=1\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=288,\n                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328Sharon-Kozicki.jpg?quality=90&strip=all&w=576 2x\" height=\"750\" loading=\"lazy\" width=\"1000\"\/><\/picture><figcaption class=\"image-caption\"><span class=\"caption\"> Bank of Canada deputy Governor Sharon Kozicki.<\/span> <span class=\"credit\">Photo by Bank of Canada<\/span> <\/figcaption><\/figure>\n<p>The deputy governor told conference attendees she expects \u201cthe pace and magnitude of interest rate increases and the start of (quantitative tightening) to be active parts of our deliberations at our next decision in April,\u201d hinting that policy-makers could end their government bond-buying program.<\/p>\n<p>\u201cThe key word in that is \u2018magnitude,\u2019 so (what) markets essentially took out of that (is) we could be looking at a 50-basis point move,\u201d Schamotta said, adding that markets had previously priced in a series of nine or more 25-basis point hikes. \u201cThey now expect at least one 50-basis point move in the coming months, perhaps at the April meeting, and so that has driven up yields really across the curve and your Canadian two- and 10-year yields now exceed their U.S. counterparts again.\u201d<\/p>\n<p>Schamotta noted that the energy sector, which plays a less influential role in the overall Canadian economy than it once did, is a smaller factor in the loonie\u2019s recent move, as it continues to shed its former \u201cpetrocurrency\u201d title.<\/p>\n<p>\u201cThe first thing to kind of emphasize is that the energy sector has shrunk in terms of its relevance to the overall Canadian economy,\u201d Schamotta said, adding that consumer spending and investments in housing have played a larger role. \u201cWhat has happened here is a shift away from market perceptions as the Saudi Arabia of the North\u2026. But we are sort of the housing bubble of the North now, and so I think to some extent, a lot of the trading activity that we see has to do with what investors think is going to happen to lending conditions in Canada to real estate prices and therefore to consumer consumption.\u201d<\/p>\n<p>Earl Davis, the head of fixed income and money markets at the Bank of Montreal, said that despite some short-term volatility due to a pullback in oil prices, he expects that the loonie will continue its hot streak this year.<\/p>\n<p>\u201cYou have an economy that\u2019s basically at full employment \u2026 and you have you have the backing of the commodity-based economy, so you\u2019ll have cash flows coming in,\u201d Davis said. \u201cSo, there\u2019s a lot of things supportive of a stronger dollar.\u201d<\/p>\n<p>Davis also dismissed any potential headwind on the horizon as being more like \u201cbreezes,\u201d the biggest of which would be the amount of spending involved in the upcoming federal budget.<\/p>\n<\/p><\/div>\n<div id=\"\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<section aria-labelledby=\"moreTopicLabel582706509982111493497764806577566\" class=\"more-topic\" data-carousel-component=\"\" data-carousel-icon-button=\"\" data-carousel-type=\"list\"> <button aria-hidden=\"true\" class=\"more-topic__button-prev\" data-carousel-prev=\"\" tabindex=\"-1\" title=\"previous\" type=\"button\"\/> <\/p>\n<ol class=\"more-topic__items list-unstyled\" data-carousel-slide-list=\"\" tabindex=\"0\">\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"Ukraine had already begun embracing crypto before its war with Russia.\" class=\"lazyload\" fifu-data-src=\"https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80&ssl=1\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=96&strip=all&quality=80,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=192&strip=all&quality=80 2x,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323crypto.jpg?h=288&strip=all&quality=80 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> How Ukraine embraced cryptocurrencies in response to war <\/span> <\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"Bank buildings in the financial district in Toronto.\" class=\"lazyload\" fifu-data-src=\"https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80&ssl=1\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=96&strip=all&quality=80,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=192&strip=all&quality=80 2x,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0323banks.jpg?h=288&strip=all&quality=80 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> Open banking presents &#8216;an opportunity, not a problem&#8217; for credit unions, Meridian CEO says <\/span> <\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"A Interac sign on a business storefront in North Vancouver, B.C.\" class=\"lazyload\" fifu-data-src=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80&ssl=1\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=96&strip=all&quality=80,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=192&strip=all&quality=80 2x,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0318interac.jpg?h=288&strip=all&quality=80 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> How the push to modernize Canada&#8217;s payment systems went off the rails <\/span> <\/h3>\n<\/li>\n<\/ol>\n<p><button aria-hidden=\"true\" class=\"more-topic__button-next\" data-carousel-next=\"\" tabindex=\"-1\" title=\"next\" type=\"button\"\/> <\/section>\n<div>\n<p>\u201cIf there were a time this year when we see a pullback, it might be after the budget,\u201d Davis said. \u201cSo, if there\u2019s more spending than expected, that\u2019s the only thing that could pull it back: fiscal spending, or lack of fiscal discipline.\u201d<\/p>\n<p>Schamotta is also predicting more growth with the loonie in the short term, anticipating that it will gain a few more cents on the back of elevated commodities prices and greater growth compared to global currencies outside of North America. But he also imparted a cautionary outlook for the dollar if Canadian household debt continues to put a strain on the economy.<\/p>\n<p>\u201cI always think of (the Canadian dollar) as Icarus, if it gets too close to the sun, the wings will melt,\u201d Schamotta said. \u201cThe Canadian dollar is very likely to be limited in the coming months, mainly by the fact that as yields rise, that is going to put additional stress on over-indebted Canadian households.\u201d<\/p>\n<p>\u201cAt some point, the narrative is going to be about whether Canadian households can withstand higher rates to the same degree that their American counterparts can,\u201d he said. \u201cAnd so, at some point, I wouldn\u2019t be too surprised to see the yield curve invert and for the loonie to move lower.\u201d<\/p>\n<p>The loonie closed Monday just shy of the 80-cent mark, falling nearly half a per cent.<b><br \/><\/b><\/p>\n<p><em>\u2022 Email: shughes@postmedia.com | Twitter: <a class=\"twitter-follow-button\" href=\"https:\/\/twitter.com\/StephHughes95\" rel=\"noopener noreferrer nofollow\" target=\"_blank\">StephHughes95<\/a><\/em><\/p>\n<\/p><\/div><\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/>\n<br \/>Loonie&#8217;s push past 80 cents may have legs, analysts say, but commodity prices aren&#8217;t the driving factor<\/a><br \/>\n<br \/>2022-03-29 11:00:27<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Breadcrumb Trail Links News FP Finance FP Economy Analysts predict that an improving economic backdrop and hawkish central bank mean there is more strength ahead for the Canadian dollar The&#8230;<\/p>\n","protected":false},"author":2,"featured_media":20143,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/no0328loonie.jpg?quality=90&strip=all&w=288&h=216","fifu_image_alt":"","footnotes":""},"categories":[31],"tags":[],"class_list":["post-20142","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/20142","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=20142"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/20142\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/20143"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=20142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=20142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=20142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}