Canadian Dollar Hits New 30 Year High

The Canadian dollar hit a new 30 year high today on the back of stronger economic data and record oil prices. Foreign purchases of Canadian securities were expected to drop 4.5 billion in the month of July, but instead, it rose for the first time in 3 months by 1.5 billion.

Demand for Canadian equities was very strong, which may suggest that foreign investors expect the Canadian economy to remain resilient in the face of slower US growth. If oil prices extend their rise that may be the case as the profits of Canadian resource companies continue to grow. The Australian and New Zealand dollars on the other hand are weaker despite a much stronger than expected service sector PMI report in New Zealand. This is due to the fact that the US dollar has strengthened on the speculation that the Fed will disappoint.

Written by Kathy Lien, Chief Currency Strategist of