Defying conventional wisdom, the Canadian dollar continues with its head above water, moving over the 75.5 cent level this morning and forging to new six-week highs.
It’s aided by the buoyancy of the crude oil market, and a less dovish outlook from the Bank of Canada Governor on Wednesday.
The interpretation of bank rhetoric to talk down the dollar is not that different, just a little innuendo about higher interest rates ahead set the dollar rallying once again.
However, upon closer scrutiny and looking at price charts of both, the Canadian dollar continues to track the price of crude, and the currency is fairly priced relative to a barrel of oil.
And with oil reserves building and consumption declining, oil is sitting at a precarious level with plenty of room below, and the same can be said about the loonie. I might be right yet.