U.S. Dollar Weakness Helps Spur Canadian Dollar

On May 23 the Canadian dollar reached a 30-year high resulting from optimism that foreign takeovers of the nation's resource-based assets will fuel currency demand. The Canadian dollar traded at a high of 92.48 U.S. cents, the highest since Oct. 4, 1977, and also reached a 15-year high against the Japanese yen. The currency has gained 7.7% so far this year against the U.S. dollar. The Canadian dollar is not the only currency gaining on the U.S. dollar. According to Bloomberg, 11 of the 16 most-actively traded currencies advanced against the dollar on this same day. The strength of the Canadian dollar is coming on the heels of broader dollar weakness, and bolstered by gains in the euro. Globally, world economic expansion is poised to continue for the rest of the year as economists’ predictions remain robust for the second quarter in a row, according to the latest International Chamber of Commerce (ICC) and Ifo World Economic Survey. Economists expect even stronger economic growth in the second half of the year but noted regional and country specific variations in economic outlooks, with a slowing U.S. economy the dark cloud on the horizon. Although the rest of the world is not as dependent on the U.S. economic growth as it was a decade ago, negative spillovers could curb strong economic growth rates in other regions. Economists surveyed downgraded their outlooks for the U.S. for the remainder of the year. The quarterly Ifo World Economic Survey is conducted in cooperation with the International Chamber of Commerce.