The Canadian dollar rose to a three-and-a-half year high in early trading Tuesday, up 0.4 of a cent to
1.06213 cents US, its highest level since early November 2007.
The Loonie's rise comes as investors respond to Bank of Canada statements suggesting it may become more aggressive with interest-rate increases. Foreign investors are treating the Canadian dollar as a safe haven while the United States struggles to reach a deal to increase its $14.3 trillion debt limit – or face not being able to pay its bills – by its August 2 deadline, now just a week away.
A high dollar impacts Canadian manufacturers, distributors and dealers – particularly those serving US-based customers.