Supported by high oil prices and the Bank of Canada's shift to tighter monetary policy, the Canadian dollar is expected to record its biggest monthly gain since April. On Thursday, the Canadian dollar rose as high as 0.2% against the US dollar, hitting its strongest level in more than a month, with a cumulative increase of 1.9% in October. The Canadian dollar is a commodity currency; last week, voters in Alberta rejected the proposal to secede from Canada, easing political uncertainty in this major oil-producing province and favoring the Canadian dollar. Andrew Hazlett, a foreign exchange trader at Monex Inc., said that the Canadian dollar further benefited from the Bank of Canada's interest rate hike yesterday, while Canada, as a major oil exporter, was also supported by high oil prices. Sarah Ying, head of foreign exchange strategy at the Canadian Imperial Bank of Commerce, said that although the market had predicted interest rate hikes before, the Bank of Canada's inflation expectations were more hawkish than expected by the market, which suggests there is still room for interest rate hikes in the future. The Bank of Canada currently expects average inflation to be 3.1% in 2027, compared with the previous forecast of 2%, and does not expect annual inflation to return to the 2% target until mid-2028. Sarah Ying said that compared to other central banks, the Bank of Canada's current rate hike cycle is still early, and there is still room for further strengthening of the Canadian dollar.

Disclaimer:Webull uses external vendor Google Translation Service for news translations where we endeavour to ensure these are correct, however, we recommend that you please double-check this information accordingly. Webull is not responsible for translation errors or issues.