The Globe and Mail reports in its Wednesday edition that Canada and the United States are on diverging economic paths, fuelling a rise in the value of the loonie that some expect will gather steam in the coming months. The Globe's Stefanie Marotta writes that boosted by a recent spike in oil prices, better-than-expected domestic wholesale trade numbers and increasing speculation that the U.S. Federal Reserve will cut interest rates next month, the Canadian dollar strengthened to close at 75.91 U.S. cents Tuesday, nearing the three-month intraday high it touched last week. The loonie is up 3.8 per cent against the greenback this year, a trend that threatens to hit margins at Canadian companies -- particularly those in the forestry, financial services and manufacturing sectors -- if it continues through the summer. Costs to transport materials such as lumber could spike in the wake of a weak dollar. Major industrial companies such as Canadian National Railway and Canadian Pacific Railway derive more than a quarter of revenue from the United States. "A strong CAD makes the revenue derived in the US less valuable, and makes shipping with a Canadian rail more expensive," warns a recent report by RBC Capital Markets.
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