Canadian dollar hits 30-year high against US rival
The Canadian dollar hit US 95 cents for the first time in 30 years today, supported by higher oil prices, a strong economy and expectations of rate hikes.
Known as the loonie because of the loon pictured on the one-dollar coin, the Canadian dollar rose nearly 11% this year and is now at its highest level since May 1977.
It hit an all-time low of 61.79 cents on January 21, 2002.
The Canadian dollar, one of the strongest performers in the world today, advanced 0.9 of a cent to 95.53 US cents after Statistics Canada reported that the economy churned out 35,000 new jobs in June, about twice the number of new jobs that had been expected.
The jobs spurt kept the unemployment rate at a 33-year-low of 6.1% for the fifth consecutive month.
The Bank of Canada makes its next decision on interest rates Tuesday, and economists believe this latest evidence of a strong economy and inflationary pressures will persuade the central bank to hike rates for the first time in more than a year.
According to analysts, the bank was expected to hike its key rate by a quarter-point from the current 4.25%.
“With the unemployment rate holding at its lowest level in more than 30 years, the report signals that pressures on capacity remain firm and the recent pickup in wage growth will be of concern to the Bank of Canada, given that the core inflation rate is already above the midpoint of the target band,” said RBC senior economist Dawn Desjardins.
