
Looking out to 2016, our hunch remains that the CDN$ could perform a counter-trend rally à la 1999 (Figure 2) and take the CDN$ back to PPP as global crude oil markets rebalance. That being said, long-term investors may not want to hedge their foreign currency exposure just yet. Figure 3 shows that the CDN$ is unlikely to reach a secular bottom until Canada’s current account turns into a surplus. We are years away from this turnaround.