The Canadian dollar is 0.2% stronger this morning and has just barely broken through the 1.300 level. It is now at its strongest since the beginning of the pandemic but also near its strongest since September of 2019. The strength is all attributable to US dollar weakness today as equity markets continue to grind higher to record levels and a sense of optimism prevails. This is why the Loonie is up despite lower oil prices and a warning yesterday from Tiff Macklem of the Bank of Canada that the economy will continue to operate below capacity into 2023 and that rates will be very low for a very long time. Next week will be a real test of the Canadian dollar’s strength. The markets will be operating at full capacity again after the US Thanksgiving holiday and there are a series of important economic indicators set to be released on both sides of the border.
