Canadian Dollar Rises Above 82 Cents U.S. For First Time Since 2017

The Canadian dollar continues to climb higher.

Lifted by high commodity prices, the loonie is now at 82.26 cents U.S., its highest level since September 2017.

The improving outlook for the global economy coming out of the pandemic has pushed up prices for commodities, which helps the Canadian dollar. Lumber prices have hit record highs due to a construction boom, and the price of a barrel of West Texas Intermediate crude oil topped $65 U.S. this week, its highest level since the pandemic started over a year ago.

The commodity boom is happening as Canada's central bank shows signs of hiking its benchmark interest rate sooner than most other countries. At its policy meeting last week, the Bank of Canada said it would slow its pace of bond buying, a sign it thinks the economy may soon need less stimulus.

Trading in financial instruments known as swaps, that bet on rate decisions, shows the market thinks the Bank of Canada will raise rates as many as two times by the end of next year (2022).

If Canada raises interest rates while other countries do not, that makes Canada more attractive to investors as a place to put their money to work. As a result, money has been pouring into the country, and by extension, pushing up the value of the currency.