The Canadian dollar is up another half of a percent from yesterday’s close. Strength in the loonie comes from oil prices moving higher, WTI crude trades at 71.54 as we write. Oil prices have spiked due to President Trumps mandate to abolish the Iran Nuclear Agreement and reinstate heavy sanctions on the world’s third largest oil producer, the increase in Middle East tensions is pushing market participants to long oil contracts. The Canadian dollar is benefiting as the oil products and services are a significant component in the Canadian economy.
Tomorrow Statistic Canada will report the Canadian employment numbers and the unemployment rate, and expectations are for 20K and 5.8% respectively.
Also helping the CAD, Canadian government yields have been increasing, with the 2-year at an eight-year high. Also helping the CAD last night, building permits came much stronger than anticipated (3.1% vs 2.0% expected).