The Canadian dollar is poised to strengthen further, despite "threats" from the country's central banker that suggest the Bank of Canada may intervene in currency markets, a market commentator said Tuesday.
Long-time Canadian dollar cheerleader and newsletter writer Dennis Gartman said it won't be long before the loonie hits 97 cents (U.S.). The currency traded at 91.76 cents Tuesday, little changed from Monday's close of 91.95 cents.
Mr. Carney has repeatedly cautioned that the currency's strength could derail an economic recovery. Speaking in Victoria yesterday, he did not rule out taking further steps to weaken the currency. "We're not out of bullets, we're just not trigger-happy," he said when asked what it would take for the bank to intervene in currency markets.
"We are really rather impressed by the currency's ability to withstand a very severe 'shot' at it just below the water line yesterday by Canada's central banker," Mr. Gartman noted, before urging readers at length to visit "wonderful, small, elegant" Victoria.
The Virginia-based investment adviser reeled off reasons for his prediction: healthier consumers, rising exports and a more robust banking system.
"Canada finds herself in an unusual position of authority… along with the Australians and New Zealanders… and she's a bit uncomfortable with that position," he said. "She shouldn't be."
The Canadian dollar has risen 6 per cent in the past three months, making it one of the world's top-performing major currencies.