Week In FX Americas – Loonie Loses Rock Star Status

The Canadian Economy has now officially lost its financial rock-star mentor, ex-BoC governor Carney. Next Monday, on Canada Day, Mark Carney starts his new role as the new top dog at the Bank of England. He has left the loonie in the capable hands of new governor Stephen Poloz. After five years at the helm, and in some of the most interesting of financial times, the CAD happens to be encroaching on its two-year lows outright.

Early on Friday morning the CAD got a mild boost from its April growth data being on target with market expectations. The +0.1% gain in GDP was mostly driven by the +0.3% gain in the services sector. Despite the headline print being optically positive, analysts note that the underlying reality is suggesting a different story line.

A small percentage of investors expect the loonies' competitiveness to be called into question in the short term. Currently, there seems to be a "continuing divergence in the Canadian economy away from export...