For the first time since mid-2015, the Canadian dollar climbed above 80 cents US.
The loonie was at 79.97 cents US when North American stock markets closed on Monday, this was a result of strong data on manufacturing sales and a positive assessment of the country’s economic outlook by the International Monetary Fund.
Since plummeting at the start of May, the dollar has gained nearly 10 per cent through June and July. A strong job market, booming retail sales and factories ramping up production is reason for this increase in value.
Adding to that is the interest rates that are upward bound.
The weakness in the U.S. dollar has also helped, it peaked shortly after Trump’s election on a promise to lower taxes, boost infrastructure and cut red tape, but it has since gone down given the realities on the ground.
The loonie is surging in part because the gloom over commodity prices has lifted, even if prices are still nowhere near their former highs.
After seven years since a hike, the sudden optimism caught traders by surprise. They rushed to cancel their short positions — financial contracts they had placed that allowed them to make money when the loonie lost ground.
A rising loonie spells good news for Canadians’ purchasing power, but bad news for export-driven businesses.
Overseas travelers will be pleased with the extra boost. – CINEWS