Latest news with #RahimMadhavji
Reuters
2 days ago
- Business
- Reuters
Canadian dollar dips as greenback notches broad-based gains
TORONTO, May 28 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Wednesday as recent U.S. economic data bolstered the appeal of the American currency and ahead of domestic GDP data that could guide expectations for the Bank of Canada policy decision. The loonie was trading 0.2% lower at 1.3830 per U.S. dollar, or 72.31 U.S. cents, extending its pullback from a seven-month high on Monday at 1.3684. "It's a U.S. dollar story - the U.S. dollar is outperforming across the board," said Rahim Madhavji, president at "The U.S. economy is potentially doing better than some had expected." Data on Tuesday showed that U.S. consumer confidence improved in May after deteriorating for five straight months amid a truce in the trade war between Washington and China. "All eyes are looking towards the GDP data on Friday in Canada, which will obviously be a key indicator for the Bank of Canada," Madhavji said. Canadian gross domestic product data, due on Friday, is expected to show that the economy grew at an annualized rate of 1.7% in the first quarter, down from 2.6% in the previous quarter. Investors expect the BoC to leave its benchmark interest rate on hold at 2.75% at a policy decision meeting next Wednesday after recent domestic data showed underlying inflation heating up in April. The central bank paused its easing campaign last month for the first time since it began cutting rates in June. The price of oil, one of Canada's major exports, settled 1.6% higher at $61.84 a barrel as OPEC+ agreed to leave its output policy unchanged and the U.S. barred Chevron CVX.N from exporting Venezuelan crude. The Canadian 10-year yield eased half a basis point to 3.252%, while it was trading 5.1 basis points further below the equivalent U.S. rate at a gap of nearly 123 basis points.
Mint
2 days ago
- Business
- Mint
Canadian dollar dips as greenback notches broad-based gains
Canadian dollar falls 0.2% against the greenback Extends pullback from a seven-month high Price of U.S. oil settles 1.6% higher Canada-U.S. 10-year spread widens 5.1 basis points TORONTO, May 28 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Wednesday as recent U.S. economic data bolstered the appeal of the American currency and ahead of domestic GDP data that could guide expectations for the Bank of Canada policy decision. The loonie was trading 0.2% lower at 1.3830 per U.S. dollar, or 72.31 U.S. cents, extending its pullback from a seven-month high on Monday at 1.3684. "It's a U.S. dollar story - the U.S. dollar is outperforming across the board," said Rahim Madhavji, president at "The U.S. economy is potentially doing better than some had expected." Data on Tuesday showed that U.S. consumer confidence improved in May after deteriorating for five straight months amid a truce in the trade war between Washington and China. "All eyes are looking towards the GDP data on Friday in Canada, which will obviously be a key indicator for the Bank of Canada," Madhavji said. Canadian gross domestic product data, due on Friday, is expected to show that the economy grew at an annualized rate of 1.7% in the first quarter, down from 2.6% in the previous quarter. Investors expect the BoC to leave its benchmark interest rate on hold at 2.75% at a policy decision meeting next Wednesday after recent domestic data showed underlying inflation heating up in April. The central bank paused its easing campaign last month for the first time since it began cutting rates in June. The price of oil, one of Canada's major exports, settled 1.6% higher at $61.84 a barrel as OPEC agreed to leave its output policy unchanged and the U.S. barred Chevron CVX.N from exporting Venezuelan crude. The Canadian 10-year yield eased half a basis point to 3.252%, while it was trading 5.1 basis points further below the equivalent U.S. rate at a gap of nearly 123 basis points. (Reporting by Fergal Smith; Editing by Aurora Ellis)
Forbes
07-05-2025
- Business
- Forbes
How Canadian Businesses Can Manage Volatility Amid Trade Wars
Rahim Madhavji is the president of Knightsbridge Foreign Exchange. getty With changes in global policy settling in, businesses in Canada are contending with volatility. Whether it's the fluctuating Canadian dollar (aka loonie), dips in the stock markets or slowdown in cross-border trade, it's clear companies must adapt or risk falling behind. At the same time, when conditions seem to change or reverse course consistently, keeping up is its own job. Making the best decisions to improve your position comes down to more than educated guesswork when the international stakes are high. So, how can companies approach volatility head-on? Look to recessionary reminders. Recession is an unfortunate potential under current conditions, but it also provides business owners with important indicators of how currency may behave. Typically, in a recession, the Canadian dollar loses value relative to the U.S. dollar, as the U.S. dollar is a safe-haven currency. Generally, though not exclusively, foreign exchange (FX) rates tend to decline overall during a recession due to less demand for a depreciating currency. However, during the 2008 financial crisis, for example, the U.S. dollar rose, going against the grain and closing out the year at a 1.224 exchange rate compared to the loonie. Currency won't follow a predetermined pattern, but some trends can be helpful to think about as you formulate a response. Beyond exchange rates, keeping an eye on inflation, unemployment and consumer confidence helps gain a clearer picture of the economic outlook. Confidence recently hit a four-year low in the U.S. (registration required), while Canada is seeing significant economic dips. What's most helpful in the face of these kinds of conditions is to look at past customer behavior in times of recession or similar as a guide for potential sales drops. Weigh depreciation and demand. If the loonie depreciates significantly, importers, exporters and traders will see serious implications. For importers, a depreciated loonie means higher costs of production, which could ultimately see these organizations see more demand abroad than at home. Exporters will fare better with a depreciated dollar, with lower exchange rates making business cheaper. A recent report from S&P Global expects uncertainty in Canada-U.S. trade to weigh on consumer and business sentiment, projecting a quarterly annualized growth rate averaging 1.2% for the rest of the year. No matter where you land, it's important to take a look at the market and act quickly during favorable conditions. If businesses fear a rising U.S. dollar, they could buy U.S. dollars in advance in bulk and hold them. Brush up on currency risks. Whether exchanging or trading internationally, it's important to understand risks specific to currency. Risk arises in three main categories: transaction risk, translation risk and economic risk, each of which requires its own considerations. • Transaction risk originates at the exchange level, meaning purchases with an international seller may cost more if the buyer's currency sits at an unfavorable exchange rate. • Translation risk occurs when a business operates in multiple jurisdictions, requiring parent companies to convert subsidiaries' financial information into their host country currency, potentially resulting in losses. • Economic risk is dependent on larger factors, like global policy, supply chain health, inflation and beyond, causing fluctuation in exchange markets and requiring longer-term resolution. The longer you exchange, the more adept you'll be at spotting how these risks take shape in your industry. Combating them isn't just a matter of experience, however. Explore hedging strategies, for example, to proactively manage potential downturns. The trade war between the United States and Canada presents businesses with challenging conditions. Through it all, the loonie will fluctuate, and it's pragmatic to recognize the potential for recession. Over the next few months, it will be essential to continuously evaluate risks at play in the market and carefully plan for added volatility. Come what may, many Canadian business leaders are already responding, setting themselves up to be more than ready to address further developments well into the year. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Reuters
14-04-2025
- Business
- Reuters
Canadian dollar edges off 5-month high ahead of BoC rate decision
Summary Canadian dollar falls 0.1% against the greenback Touches five-month high at 1.3829 Price of US oil decreases 0.6% Bond yields ease across the curve April 14 (Reuters) - The Canadian dollar edged back on Monday from an earlier five-month high against its U.S. counterpart as oil prices fell and investors turned their attention to a Bank of Canada interest rate decision this week. The loonie was trading 0.1% lower at 1.3875 per U.S. dollar, or 72.07 U.S. cents, after touching its strongest intraday level since November 6, at 1.3829. 'It had a good run over the last little bit. The rally ran out of steam,' said Rahim Madhavji, president of 'Everyone is looking towards the inflation report for Tuesday and then the Bank of Canada monetary policy decision on Wednesday.' Canada's consumer price report for March, due on Tuesday, is expected to show inflation matching the 2.6% annual rate it posted in February. Growing recession risks to Canada from the U.S.-led trade war will push the Bank of Canada to cut interest rates at least twice more this year, according to a Reuters poll, although a majority of the economists said policymakers will leave the benchmark rate unchanged at 2.75% on Wednesday. Investors see a 55% chance of a pause in rate cuts, swaps market data shows. The price of oil, one of Canada's major exports, was trading 0.6% lower at $61.15 a barrel on concerns that the trade war could weaken global economic growth despite exemptions for some electronics from U.S. tariffs. Speculators have reduced their bearish bets on the Canadian dollar to the lowest since October, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of April 8, net short positions had decreased to 119,241 contracts from 130,016 in the prior week. Canadian bond yields moved lower across the curve as U.S. Treasury yields pulled back after an epic surge last week. The 10-year was down 13.6 basis points at 3.131%.
