What’s behind the loonie’s rise?

by Maximillian on 03/08/09 at 11:51 am

Last week’s rosy economic outlook by the Bank of Canada – it declared the recession over – helped boost the dollar (CAD/USD-I0.940.011.07%) . Currency markets shrugged off Bank of Canada Governor Mark Carney’s caution that a high dollar could hamper the recovery, focusing instead on his comment that Canada is emerging from the recession in much better shape than most other industrialized nations.

Currency traders are betting that a U.S. recovery will spark a global recovery “and Canada will be the beneficiary of that,” Bank of Nova Scotia currency strategist Camilla Sutton said this week.

A Canadian Natural Resources pump jack pumps oil out of the ground near Dorothy, Alberta, June 30, 2009. CNR is a large Canadian energy producer.

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