Yes, hard for most people who have ONLY lived through the markets with a strong commodity foundation to believe that the Canadian Dollar was once trading at 1.60/USD
Today the Canadian Dollar is off another 50bps and has weakened against the US Dollar almost "3 big figures" since the start of the year.
Take a look at the breakdown in the CAD and weigh this against long term charts and you can see where a continued breakdown in commodity prices and demand may send the Canadian economy. Recent jobs data and consumer confidence have been nothing short of ugly. A Canadian housing bubble is another issue that looms over the "Loonie".
Despite US Dollar weakness since Friday’s disappointing NFP release the USD is well positioned to move higher against major crosses ex-Euro in the next 12 months on a combination of Fed tapering, USD economic above trend growth and the travails of the rest of the G8.
Playing a long USD/short CAD trade leaves you well positioned to hedge against a long commodity view, or even a view that the miners are oversold and can rally even if we do not return to pre-crisis China stoked commodity demand. A way to trade this using ETFs would simply be to short the FXC (FXC, quote) ETF.