Weaker U.S. dollar to boost TSX stocks in 2025, especially these Canadian firms with large foreign sales #CanadaFinance

Currency winds are blowing in favour of Canadian stocks in 2025, according to CIBC Capital Markets.

Analyst Ian de Verteuil sees the S&P/TSX Composite index (^GSPTSE) pushing higher as Canadian firms earn big chunks of revenue in foreign money, gold prices stay high, and fears persist over the U.S. economy suffering under President Donald Trump’s trade wars.

Meanwhile, he says speculation is mounting about a so-called “Mar-a-Lago Accord,” a potential directive from the White House to improve the global standing of U.S. industries by weakening the greenback and restructuring America’s foreign debt.

“The U.S. dollar has been somewhat weak this year, despite the implementation of several rounds of tariffs. This is partially due to the less robust U.S. economic outlook, but also a sense that the Trump administration would embrace a lower greenback,” de Verteuil wrote in a research note on Thursday.

“The net effect of currency changes has been, and should continue to be, beneficial for the S&P/TSX.”

Last week, the price of gold (GC=F) topped US$3,000 an ounce for the first time ever.

“The S&P/TSX has become the de facto home of gold companies, and they currently make up close to 10 per cent of the float capitalization of the index,” de Verteuil wrote. “A weaker U.S. dollar has helped support gold prices, and a large proportion of the S&P/TSX market cap.”

At the same time, he estimates 60 per cent of revenue for TSX-listed companies is booked in currencies other than the Canadian dollar.

“The second (and most direct) impact of currency moves on the S&P/TSX comes from the fact that, like Canada, the index is quite global,” de Verteuil wrote. “With most of the revenue for the S&P/TSX booked outside of Canada, this should provide earnings tailwinds throughout 2025.”

“The companies with large non-Canadian revenue, but which report in Canadian dollars are likely the winners (i.e., not only do they benefit from being diversified outside of Canada, they also are likely to surprise positively on reported earnings in the first and second quarters of 2025),” he added.

CIBC Capital Markets compiled a list of S&P/TSX 60 companies with the largest shares of non-Canadian revenue in their last fiscal year.

De Verteuil notes that while Canada’s oil and gas producers benefit from booking revenue in U.S. dollars while spending loonies, swinging commodity prices (in U.S. dollars) dwarf the impact of currency moves.

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

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