The Canadian dollar continues to strengthen against the U.S. dollar and is outperforming
other currencies among the Group of 10 (G10) leading industrialized nations.
The Canadian dollar rose to 72.65 U.S. cents on Oct. 16. It was the only G10 currency to strengthen against the greenback.
The loonie, as the Canadian dollar is known, is getting a lift from a rise in commodity prices, as well as expectations for further interest rate cuts by the Bank of Canada.
Futures traders are betting 80% that Canada’s central bank will lower interest rates another 50-basis points at its next policy meeting on Oct. 23.
The Bank of Canada has already reduced interest rates by 75-basis points this year.
At the same time, prices for commodities ranging from gold to orange juice are at or neat all-time highs, bolstering the Canadian dollar.
The rise in the loonie comes as the Toronto Stock Exchange is at a record high, also bolstered by increasing commodity prices.
The Canadian economy is resource based and closely tied to commodities such as oil and metals.
