Brace yourself, Bay Street. The next few months are going to be rough. No matter what you work on, no matter the deal size, it just won't compete with daily updates on the Canadian dollar. Accept it now: We are a loonie-loving nation.
Don't take it personally – it's been this way for years. Reviewing our readership stats, loonie stories sometimes draw more eyeballs than historic news events, such as President Barack Obama's nuclear arms deal with Iran. Canadians devour dollar updates the same way they obsessively read horoscopes – as if our currency somehow helps make sense of the universe.
The sad reality: It's only going to get worse. Our dollar's value is going down the drain relative to the greenback, and it's prompting all sorts of panic. Canadians don't seem all that fussed about five straight months of shrinking gross domestic product, but we absolutely can't stand looking like chumps relative to our southern neighbours. Call it an inferiority complex of the highest order – at least that's my theory.
Because few people expect the dollar to rebound any time soon, not after the Bank of Canada cut interest rates twice in six months, there's very little that's capable of stealing back the loonie's spotlight. It would take a housing market crash, a wild Canadian election or the return of Mark Carney. (Long ago we learned that putting the former central bank governor's name in a headline boosts the likelihood that a story gets read. He'd probably break the Internet if he opined on Canadian home prices from across the Atlantic.)
All of this can be incredibly frustrating for dealmakers. You might slave away for six months on a complex takeover or an initial public offering, and then the day you announce the deal the loonie falls 0.3 cents relative to the greenback.
Take it from me, trying to make sense of this is futile. It's just as frustrating for reporters who finesse a great feature story or write a ripping column and then find out the loonie moved a half a cent the same day it gets published. I've learned to embrace our country's collective insanity, the same way I've learned to tolerate questions at family parties about the outlook for mortgage rates.
Amid the silliness, one subsect of Bay Street can't help but be happy with the dollar's fluctuations: currency strategists. Market swings force major corporations to seek help, because they have to settle on hedging strategies.
Yet even the strategists are realistic. Chatting with some, they admitted our loonie obsession is often perplexing. As much as the dollar matters, its moves often pale in comparison to major human dramas playing out around the world. The strategists also find our knee-jerk panic often prevents us from seeing the benefits of a sinking loonie.
Referring to the heartbreaking news of migrants flooding Europe in search of new lives, one loonie expert wrote in an e-mail: "Hard to know why the level of CAD even matters at all in that context, we are a terribly rich country and a weaker currency will help us ease the impact of a recession with relatively strong social services."
Let's be clear: the loonie's value certainly can't be ignored. It matters for exporters, and its moves sometimes signal valuable information. Unlike stocks, which are pretty easy to make sense of, currency prices have a lot of information baked into them. The economics team at Toronto-Dominion Bank recently noted the weak loonie largely stems from the ugly outlook for oil prices – looked at from another paradigm, as bullish as you might be about Canadian energy, the loonie is warning you not to be.
If the loonie keeps sliding – TD expects it'll be worth 73 cents versus the greenback in 2016 – we're going to have to make the best of an ugly situation. The first step: remember that as much as our slide hurts, it isn't all our fault. Sure, resource-based countries are taking it on the chin, but most major currencies have fallen relative to the greenback. U.S. economic strength is the new sexy story.
And as inferior as some Canadians may now feel relative to Americans, the loonie is nowhere near being called the "northern peso" again. Our federal government has pretty spiffy finances relative to other countries. We've come a long way from 1995, when the Wall Street Journal infamously dogged the Canada dollar because Ottawa's books were in a state of peril.