The loonie's failure to keep pace with the surge in crude oil prices this year was thrust into the spotlight Tuesday morning by a prominent strategist.
"The Canadian dollar is lining up to be the world's most frustrating currency. Cheap, but held back by soft growth and housing market concerns," wrote Societe Generale Global Fixed Income Strategist Kit Juckes in his morning report to clients, while noting how currencies are trading amid a "stand-out" move in oil prices.
Indeed, crude has marched steadily higher this year, with West Texas Intermediate surging almost 42 per cent in 2019. Meanwhile, Western Canada Select's rally has been even more impressive, with prices up almost 90 per cent in 2019 amid forced production cuts and other intervention by the Alberta government.
Despite that backdrop, and the loonie's reputation as a so-called petrocurrency, the Canadian dollar has seen choppy trading activity so far this year. It reached a high of 76.51 cents US on Feb. 1 and closed on Monday at 75.11.
Juckes isn't the first observer to note the disconnect.
"I think this is a really underplayed story," said BMO Financial Group Chief Economist Doug Porter in a recent interview with BNN Bloomberg.
"The extent to which not just global oil prices, but Canadian oil prices, have come flaring back so far this year. And, to me, that really hasn't been reflected at all in the Canadian dollar."
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