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OIL PRICES AND THE CANADIAN LOONIE

Oil Prices and the Canadian Loonie

Study Released April 19, 2012

Commodity Report - Crude Oil - March 2012

Oil prices have experienced large fluctuations in recent years (see Figure 1). The spike in crude oil prices to more than US$140/bbl in mid-2008, followed by a steep decline in late 2008/early 2009 and subsequent rebound over the last two years have definitely shaken the world economy and pinched consumers at the fuel pump. At the same time the Canadian dollar has appreciated against the US dollar. After it hit an all-time low in 2003, the Canadian dollar was rising against the US dollar. Since January 2002, the loonie has gained more than 40 percent against the American dollar. By February 2008, the dollar had reached parity with the US currency - its highest rate since 1976. Despite a short period of time when the loonie depreciated as oil prices fell, it rose all the way back to parity, and some analysts say there is still room to grow..... Download full report.

March 2012