Ever since January 2014 the crude prices have been in negative correlation with USD/CAD, The above chart evidences the same every bit of movements in both prices. The significance of crude for the Canadian dollar is not mere the value of its single largest exporting capacity but it is an extra common substitute in the present situation for the general Canadian economy that had become highly leveraged to oil prices. Like U.S, home equity loans that bolstered consumption, investment and asset prices.
It has been almost more than a year that the crude oil front month light sweet crude and Canadian dollar have been diverging in the opposite direction. However, the capital inflows and outflows of Canada swamp the oil exporting valuations which are also offset by the fact that provinces in the east import oil.
In 2014, Canada exported almost close to $105 bln of energy goods and imported about $46 bln of energy goods. Let's not forget that Canada is an important exception to the US ban on oil exports. In fact, the conventional model has been for the eastern regions to import more expensive Brent, while a few western provinces export cheaper oil to the US.
