Search
Close this search box.

Explore the world.

Assess underlying fundamentals and market conditions in the world's major economies.

Americas

Stay ahead.

Follow the biggest stories in markets and economics in real time.

Connect with us.

Learn more about Corpay Cross-Border and the currency research team.

Subscribe

Get insight into the latest trends and developments in global currency markets with breaking news updates and research reports delivered right to your inbox.

After signing up, you will receive regular newsletters from Corpay, and may unsubscribe at any time. View Corpay’s Privacy Policy

Rates, Relief, and Reincarnation

The Bank of Canada held rates steady a few minutes ago, and many homeowners are probably experiencing feelings of relief, hoping for lower borrowing costs and a recovery in real estate values.

But James Carville, Bill Clinton’s chief strategist (the important kind of strategist, not the FX kind) famously said: “I used to think that if there was reincarnation, I wanted to come back as the President or the Pope or as a .400 baseball hitter. But now I would want to come back as the bond market. You can intimidate everybody.”

If US bond yields keep rising, bank funding costs will remain high, and Canadian mortgage rates will remain elevated – despite the Bank of Canada’s pledge to remain on hold. This is important from a currency perspective, because to some extent, the loonie’s underperformance this year hasn’t been purely driven by rate differentials – it has also related to the rising likelihood of a consumption crunch among over-indebted households that are fundamentally exposed to shifts in the global rates landscape.

Relief is probably coming at some point, but homeowners and Canadian dollar bulls (let’s be real, they’re the same thing), can’t breathe easy just yet.

(And for the record, if there’s reincarnation, I hope to come back as a Labrador retriever)

Will the positive vibes last?
Markets Recover As Geopolitical Risk Premia Evaporate
Sentiment swings
Israeli Strike Triggers Short-Lived Volatility Spike
Dollar Juggernaut Slows, But Remains Powerful
Higher for (even) longer