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FX & Y, North America

The loonie and the leavers

On October 19th, Albertans will answer a question no province outside Quebec has ever formally put to its voters: whether to begin the legal process toward a binding referendum on leaving Canada. The wording is deliberately indirect—this is a vote about whether to hold a future vote—and it sits alongside nine other ballot questions on immigration and the constitution. But its symbolism is potent. Under Premier Danielle Smith, a separatist impulse long confined to the fringes of her United Conservative Party has reached the mainstream, potentially impacting the broader Canadian economy and the loonie’s value. Prime Minister Mark Carney has...

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The world’s most crowded trade

This afternoon’s first-quarter results from Nvidia are unlikely to cool the artificial intelligence frenzy. In nominal terms, net income almost certainly grew to a level no public company has ever surpassed. But the chipmaker’s dazzling numbers—and the reaction felt across asset classes—will also illuminate a risk that ought to concern investors and businesses far beyond Silicon Valley: the sheer concentration of global wealth in American technology stocks, and the exposure of the rest of the world to any stumble. Start with scale. American equities are now worth—on paper, at least—$76trn, an amount approaching 70% of world output*. A decade ago...

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Yuan step at a time

It has become a cliché to say that America and China operate on entirely different historical timescales—but sometimes clichés contain a grain of truth. As Donald Trump meets Xi Jinping this week, talk has turned to the possibility of a currency accord, akin to the Plaza Agreement of the 1980s, in which China agrees to let the renminbi appreciate. Anyone expecting an immediate breakthrough would do well to remember that Beijing measures progress in decades, not news cycles. On paper, the renminbi looks firm, trading near a nominal three-year high as today’s state banquets get underway. China no longer intervenes...

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The shekel paradox

The factors driving Israel’s currency higher may owe less to Jerusalem than to Silicon Valley The Israeli shekel’s surge to a 33-year high against the dollar—breaching the psychologically significant threshold of three to the greenback for the first time since 1993—is one of the stranger puzzles in global currency markets. Up roughly 24% since early last year and nearly 10% in 2026 alone, the shekel is outpacing every one of its peers, even as the country remains embroiled in a multi-front conflict. The most popular fundamental explanations for the rally are, on closer inspection, wanting. Start with defence exports. Israel...

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The superpeso’s next act

Mexico’s currency has had an improbably good run. The peso appreciated 15% against the dollar last year, and has continued its run thus far in 2026, printing another 4.5% gain. Yet beneath the superpeso’s gleaming surface, the economy it represents looks decidedly less impressive. Growth has been feeble. GDP expanded just 0.6% in 2025, and the economy contracted outright in the first quarter of this year. American tariffs—first levied under the International Emergency Economic Powers Act, then replaced with duties under Section 122 of the Trade Act—have cast a long shadow over manufacturing, particularly the automotive sector that forms the...

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