The Canadian Dollar has performed strongly against its haven-associated counterparts in February, climbing over 2.2% and 1.8% higher against the Japanese Yen and US Dollar respectively. This strength comes on the back of rallying oil prices, with WTI crude surging above $60 a barrel for the first time since January 2020.
Oil prices have gained substantial ground as freezing temperatures in the US result in a 3.5 million barrels a day reduction in overall output. The prospect of additional fiscal stimulus from the Biden administration has also buoyed the Loonie against its North American counterpart, with the House aiming to vote on the President’s $1.9 trillion coronavirus-relief package on February 26.
Locally, investors appeared to have looked past January’s disappointing jobs figures, with the unemployment rate unexpectedly climbing to 9.4% (exp. 8.9%) and the participation rate dropping to 64.7% (exp. 64.9%). Indeed, with Canadian coronavirus infections dropping dramatically, its seems reopening hopes are buoying the local currency.