The Loonie is High as a Kite — Thanks to America’s Troubles

The Background

There is a long list of reasons why we may be disappointed in America’s current administration, but our currency isn’t one of them. As Trump and his band of “beleaguered” misfits struggle to keep up appearances around the world, our loonie is benefitting from their challenges. Yesterday, the Canadian dollar danced around 80 cents U.S. for the first time in more than two years. The jump is also thanks to a boost in oil prices and the recent Bank of Canada key interest rate hike. Globe and Mail

What Else You Need to Know

If you’re looking to do some cross-border shopping or travelling, now’s the time. But that’s not the only good news for Canadians: economic experts think that this rally is here to stay. Since there’s a good chance there’s another interest rate hike coming our way later this year (79% chance if we’re being exact), investors and hedge funds are backing the loonie for the first time in a long time, after taking record short positions just two months ago (a.k.a. betting against it). According to Shaun Osborne, chief foreign-exchange strategist at the Bank of Nova Scotia, “the market may be at a point where a lot of good news is priced into the Canadian dollar already.”

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