The Canadian dollar strengthened to a three -year high against the U.S. dollar, driven by rising crude oil prices and hawkish Central Bank of Canada (BOC) monetary policy decisions against the U.S. Federal Reserve (Fed).
The loonie strengthened around 1.2270 against the US dollar, extending gains since last Friday and performing best among the G10 currencies.
Crude oil prices continued to trade higher on the back of market confidence in the recovery of growing global demand, particularly in the United States, the UK and China.
This brought Brent crude oil back strong above $ 68 a barrel, while US WTI strengthened at $ 64 a barrel.
Meanwhile, the BOC’s decision to reduce government bond purchases at last week’s policy meeting still supported Canadian dollar trading, especially after the Fed announced its monetary policy decision.
In contrast to the more hawkish BOC, the Fed decided to stick with the current monetary policy easing and showed no signs of bond buying being reduced in the near term.
This has prompted the greenback dollar to trade weaker against the loonie dollar, although on the other hand, it strengthened against other major currencies after being supported by positive economic data.
