The Financial Post reports in its Tuesday, April 13, edition that the loonie has rallied against the greenback over the past year, but it now appears to be losing steam.
The Post's Yaddullah Hussain writes that the Canadian dollar has been among the best performing currencies against the U.S. currency, surging nearly 10 per cent in a 12-month period, and is up 1.6 per cent year-to-date, buoyed by higher commodity prices. The currency also recently briefly breached the psychologically important 80-U.S.-cent barrier (or $1.25 (Canadian)).
However, a number of Canadian bank economists believe the loonie's run is about to end, especially as oil prices start to plateau.
Oil-exporting countries led by Saudi Arabia are expected to pump more oil over the summer that would likely lead to a pullback in oil prices.
CIBC economists Katherine Judge and Avery Shenfeld wrote Friday, "Combined with a USD that is now broadly back in favour with investors, the Canadian dollar no longer looks set to appreciate, and will likely remain steady into mid-year." BMO chief economist Doug Porter is also surprised by the resiliency of the Canadian dollar, given the slow vaccine rollout in Canada compared with the U.S.
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