Canadian Dollar Is Holding on Strong after Gains

Written by: Timothy St. John • Thursday, April 22, 2021 • 1 min read

• Last updated: Thursday, April 22, 2021

The Canadian loonie made gains on Wednesday and then held onto those gains throughout Thursday. On Wednesday, the Canadian dollar hit a high of 1.2472, which was the strongest intraday trading in weeks.

Currently, the Canadian government is deciding whether to release further stimulus checks to citizens as restrictions continue for Covid-19’s third wave in the country. Strong performance by the Canadian dollar is also attributed to a better than expected economic outlook from the Bank of Canada.

It is not all good news from the Canadian economy, though. The Bank of Canada expressed concern that the high price of housing may lead to stretched lending and borrowing. The fear is that this economic environment could cause a major downturn for individual households as well as for financial institutions. Housing prices were up 1.1% for March compared to February, and reports show an increase of 7.9% each year for the past few years.

USD/CAD is doing well as it makes gains up from a monthly low of 1.2460, but analysts predict those gains could be quickly lost as the Canadian central bank starts to pull back on the quantitative easing program. Significant changes are not expected, but day traders could see enough action to make the instrument worth watching closely.

USD/CAD

By comparison, the economic outlook for the US is considered volatile at this time, with factors like covid restrictions and vaccination spread working significantly different from its northern neighbor. Political unrest and division continue to strongly affect the US economy and the US dollar in unpredictable ways despite the current administration’s claims of working toward national unity.

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ABOUT THE AUTHOR See More

Timothy St. John

Financial Writer - European & US Desks

Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.