"Make up a story so they think we know what we're talking about..."

Bloomberg.com thinks that the loonie rise in that last couple days is due to diminished concerns of a North American recession. I have my doubts.

Dec. 17 (Bloomberg) -- The Canadian dollar rose against all 16 most-actively traded currencies, advancing the most in two weeks versus the U.S. currency, on speculation North American economies will avoid recession.

The Canadian dollar extended gains from Dec. 14 that followed reports showing gains in U.S. retail sales and consumer prices and increases in Canadian manufacturing and exports. The U.S. purchases about 80 percent of Canadian exports. The U.S. dollar gained against 12 out of the 16 major currencies today.

``For the past little while, the Canadian dollar had been paired with the U.S. dollar. If the U.S. were to go into recession, Canada would follow,'' said Jonathan Gencher, director of foreign-exchange sales in Toronto at BMO Capital Markets. ``Given the rebound in the U.S. dollar, the Canadian dollar is also benefiting.''

Canada's dollar advanced to C$1.0058 per dollar at 4 p.m. in Toronto from C$1.0172 on Dec. 14. It has gained almost 16 percent against the U.S. currency this year, the second-most among the 16 major currencies, trailing the Brazilian real.

Get the full version here

--Fist of all, you shouldn't be attributing a small two day rally to anything but randomness. Secondly, the reason they give...isn't true. Look at the prediction market forecasting the probability of a U.S. recession.


The line represents the probability of a recession. Do you see a large drop in the last couple days? Bloomberg does.