The Canadian dollar advanced to a 6-year high as a result of overall US dollar weakness and rising oil prices. The Loonie is now up 5% against its U.S. peer year-to-date and is the best performing G10 currency over that period. The immediate catalyst for weakness in the US dollar is the decline in Treasury yields in response to subsiding fears of a sooner-than-expected of tightening of monetary policy by the Federal Reserve. Fed officials continue to dismiss those fears in various speeches. On Wednesday, the U.S. central bank will release minutes from its most recent meeting, which may give indications about where monetary policy is headed. The US currency is also at multi-month lows versus other major currencies. At the same time, further helping the Loonie is the fact that oil prices are perking up again on optimism about reopenings in the US and Europe and despite worsening pandemic conditions in other parts of the world.
