But a combination of several factors has the dollar at least
"I think it is fair to say that (the dollar is) stronger than many had thought,"
Among the factors driving the loonie higher: a revised view of Canadian inflation trends, a weaker American economy and currency and a strong demand and prices for Canadian resources, particularly oil.
Chandler considers a weak U.S. currency as the leading factor for the loonie's relative strength but said it's also getting a boost from recent Bank of
"If you have your central bank, the Bank of
"And if they step away from that, you take away that source of currency weakness."
"A lot of global capital is seeking higher rates of return, so we're seeing some of that money parked in the Canadian money market," Guatieri said
But Guatieri said BMO is still expecting the Canadian dollar's value will drop closer to
"There are many other factors that suggest that the Canadian dollar should not be at
"Outside of energy, the trade balance is still shrinking, still declining. For example, our trade balance in automobiles is plunging off a cliff and that is a function, partly, of an overvalued Canadian dollar."
Based on research that BMO did into retail-level pricing, he said, a Canadian dollar needs to be worth less than
"It's only when the Canadian dollar is closer to the mid-80s that the price differential is equalized in the two countries," Guatieri said.
He said it's a different picture in energy commodities, particularly because of "elevated oil prices and strong U.S. demand for our oil (and) the fact that we've had much better success getting our oil down to the
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