The Canadian dollar rose on Thursday to its highest level against its U.S. counterpart in more than three and a half years as the greenback fell broadly and prices of some of the commodities Canada produces surged. "Commodities matter a fair deal to the Canadian economy," said Michael Goshko, corporate risk manager at Western Union Business Solutions. "When commodity prices strengthen, so too does the Canadian dollar."
The Canadian dollar is expected to give back some of its recent gains over the coming year as the Bank of Canada's more hawkish stance is offset by potential dialing back of the U.S. Federal Reserve's asset purchase program, a Reuters poll showed. The median forecast of nearly 40 strategists in the May 3-5 poll was for the Canadian dollar to weaken 1% over the next three months to 1.24 per U.S. dollar, or 80.65 U.S. cents. "We think a lot of good news is in the price of the CAD, so we look for a little bit of tactical softening," said Mazen Issa, senior FX strategist at TD Securities in New York.
Economic data from the Eurozone and the U.S will be in focus today. On the monetary policy front, the BoE will deliver direction for the Pound.