HSBC analysts say Canada’s energy infrastructure constraints limit CAD upside even as oil prices rise.
The Canadian Dollar shows muted gains despite higher oil prices, constrained by limited export capacity to non-US markets. HSBC analysts highlight that Canada’s energy exports remain largely US-focused, often trading at a discount due to pipeline bottlenecks and restricted west-coast access.
Historically, Canada’s terms of trade should improve with oil rallies, but structural issues prevent full monetization of global price spikes. Most Canadian crude and LNG exports lack direct routes to Europe or Asia, reducing sensitivity to oil dynamics.
HSBC notes that supply-shock-driven oil spikes often coincide with USD strength and risk aversion, further capping CAD upside. Even a prolonged Strait of Hormuz blockade may not significantly boost the currency under current conditions.