Rate Hike Speculation Helps Canadian Dollar

There is speculation that the Canadian dollar is strong enough now that a rate hike from the Bank of Canada could come sooner than expected. The news is helping the loonie against its European counterparts.

Even though the Canadian dollar is lower than its US counterpart, the loonie is seeing some gains today. The Canadian dollar is stronger against the UK pound and euro, thanks to speculation that the Bank of Canada could hike rates sooner than expected.
Bank of Canada Governor Stephen Poloz expects the economy to improve more than expected, and that is leading to speculation that a rate hike could be coming. European currencies, particularly the euro, are still some ways away from rate hikes and the end of quantitative easing programs.
Also providing some help for the loonie in Forex trading is the fact that oil prices are moving higher. After falling below $50 a barrel some weeks ago, today crude oil is trading above the $60 mark. This is helpful to the loonie, even though it hasn’t been able to overcome the greenback today.
At 11:06 GMT USD/CAD is up to 1.2045 from the open at 1.2005. EUR/CAD is lower, though, falling to 1.3745 from the open at 1.3746. GBP/CAD is down to 1.8892 from the open at 1.8897.

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