Energy prices are on the rise as one of the largest pipeline companies in the US was the target of a cyber attack which has shut down much of its capacity across that country. While the biggest impact was on gasoline futures, oil prices rose in sympathy and are now approaching the highest levels in the pandemic period. As a result, the Canadian dollar has gained another 0.3% against the US dollar and continues to trade at its highest levels since April of 2015. The US dollar (USD to CAD) which until three weeks ago was at 1.26 only two weeks ago is now nearing 1.21. With global sentiment trending positive and stocks ploughing further into record territory, the strength in the Canadian dollar seems justified. In terms of near-term risk to the Loonie, we hear from Governor Macklem on Thursday and there is a small chance that he seeks to recalibrate the Bank of Canada’s hawkish message, especially in light of the weak jobs numbers on Friday. Other than that, there is always the risk to oil prices moving down and treasuries creeping up in the US as a result of inflation. Until and unless we see one of those factors move, the Canadian dollar is going to continue to show strength.
