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Forget Justin Trudeau, It's Oil That's Driving This Loonie Rally

  • Canadian dollar has risen 17% since its mid-January low
  • Crude tops deficit spending, central bank as currency driver
Canadiian dollars are pictured in Toronto on March 26, 2005.
Photographer: Norm Betts/Norm Betts, photographer
Updated on

It’s giddy times in Canada, with newly installed Prime Minister Justin Trudeau winning rave reviews at home and abroad, the nation’s economy generating some of the best positive surprises in the world and the domestic stock market soaring again.

And yet all foreign-exchange traders seem to want to know is what’s the latest price for crude oil. While Canada has made progress to lessen its dependence on the commodity, the local dollar’s correlation to oil has climbed, hovering near record-high levels touched in 2012, according to data compiled by Bloomberg.