After avoiding Canada during its currency’s historic three-year collapse, Fidelity Investments is sensing the rout is nearing an end.
David Wolf, who manages $55-billion ($40-billion U.S.) for the world’s second largest mutual-fund company, is starting to put on hedges protecting against Canadian-dollar strength on the overseas investments that he manages for local clients. He’s also picking through the country’s stock market in anticipation of better economic times ahead.
The Canadian dollar is bouncing back from a 13-year low reached last month in a climax to the longest, deepest depreciation in its history. With the free fall in oil prices that drove the currency’s plunge looking less and less likely to reverse, the country is counting on a weaker dollar to transition away from its dependency on commodity exports to a more manufacturing-based economy.