The loonie is the top-performing currency this year (not counting the crypto kind). Surging commodities, along with a more hawkish turn by the central bank, has pumped the Canadian dollar to six-year highs above 82 cents US. Looking ahead, economists at Bank of Montreal forecast the USD/CAD at 1.1750 by late-2022.

A fierce rally in commodity prices fueled the loonie

“Resource prices are expected to ease moderately as more supply comes online and as consumer spending is diverted toward the service sector. Still, prices should remain supportive, and with the Bank of Canada likely to raise rates a little before the Fed, the loonie looks to have found its groove.” 

“We see the CAD cruising above 83 cents at year-end and to around 85 cents (USD/CAD at 1.175) by late 2022, partly on the back of a softer greenback as safe-haven demand ebbs further.”