Paper Market Outlook — Stocks Are on the Rise

The impact of the exchange rate with Canada can potentially be more significant since it is by far the largest source of U.S. imports, he explains. The weaker dollar makes Canadian mills less competitive and can also result in upward pressure on prices.

Excess capacity sometimes overwhelms the impact of exchange rates, Leclair says, as it has in Europe for the past couple of years. "Over the short term, manufacturers have an interest in running their machines and shipping wherever they can," he observes.