The Canadian Dollar is making a run at forex history, having
reached a 30-year high against the USD this week. The currency has appreciated by over 50% since
2002, and is up 9.4% this year alone. The
Loonie is surging on a combination of high commodity prices and attractive
interest rates. It is no coincidence
that the price of oil has more than tripled over the five year period that the
Loonie also appreciated in value. In
addition, the Bank of Canada is expected to raise interest rates two more times
in the near-term which would bring its interest rate levels close to parity
with US rates. The last time the Canadian
currency, itself, stood at parity with the USD was in 1976. While it now seems inevitable that the
currency will soon return to that marker, there are still hurdles that need to
be cleared. Bloomberg News reports:
“A strengthening currency has started to adversely affect
the country’s growth, especially the manufacturing sector, which may raise
concern the BOC needs to keep rates on hold.”
Read More:
Canada Dollar Reaches 30-Year High on Outlook for Rate Increase
Original post by Jimmy Atkinson and software by Elliott Back
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