Global financial markets are a web of stock and bond markets, currencies, businesses and countries. No one person understands it all. But there are pieces of this web which are understood and one piece is the relationship between bond spreads (or the differences in various countries long and short term interest rates) and currencies. It is these bond “yield differentials” that can impact the direction of the currency. So – If Canada’s interest rates stay low relative to the US, so will our dollar.