The Canadian dollar hits levels not found in 14 months by topping 79 cents.
The Canadian dollar was trading at an average cost of 78.91 cents U.S., up 0.44 of a U.S. cent.
The upward move in the dollar comes two days after the Bank of Canada knock up a key interest rate without precedent for a long time.
The move had been broadly expected, as bank authorities had been motioning in the course of recent weeks that they thought the Canadian economy was performing admirably and that past interest rate cuts had done their job.
“The currency was buoyed by the Bank’s move and tone, as well as a generally softer U.S. [dollar], and a $2 rally in oil prices for the week,” BMO Financial Group chief economist Douglas Porter said in a commentary. “Before wondering if the [Bank of Canada] went too far, note that the Aussie dollar popped 2.8 per cent this week, while the Mexican peso roared 3.2 per cent.”
Economists called attention that the Bank of Canada chose to hike its benchmark rate despite the fact that inflation is as of now underneath the bank’s expressed focus of two percent. The bank said it trusts the present delicate quality in the rate of inflation is just impermanent.
“By saying it will look past this current softness, the Bank is leaving an October rate hike on the table,” CIBC economist Royce Mendes said in a commentary issued Friday. “As a result, with the [U.S.] Fed likely taking a more cautious approach in the near term, look for the loonie to remain at these stronger levels until late-2017.”
In New York, the Dow Jones industrial average climbed 84.65 points to 21,637.74, the S&P 500 index included 11.44 points at 2,459.27, and Nasdaq increased 38.03 points to 6,312.47.
The August crude contract picked up 46 cents to $46.54 (U.S.) per barrel and the August gold contract added $10.20 to $1,227.50 an ounce.