Canadaâ€™s Dollar opened at 97.13 cents U.S., nearly one and a half cents from Friday. A weak U.S. dollar is pushing up the demand for oil and other commodities, which has boosted the loonie as a commodity linked currency.
The dollar has gotten stronger, which makes it more difficult for companies that export to the United States or selling goods on the world markets.
Canadaâ€™s export based industries, suffered as the loonie soared above parity with the U.S. dollar in 2007 for the first time in decades.
The rise of the dollar followed a strong performance last week, when short term government bonds plunged after the employment report showed employers added 6 times more jobs to the workforce than was predicted.
RBC Capital Markets has noted that investors should sell the U.S. dollar against its Canadian counterpart on prospects the Bank of Canada will increase rates sooner than the Federal Reserve.
The Canadian currency has posted a 3.6% gain for the week, making this the biggest five-day advance since July.
Sue Trinh, a senior currency strategist in Sydney noted that it will be clear that the Bank of Canada will raise interest rates well ahead of the Federal Reserve once it embarks on the normalization path, ratite hikes will become more aggressive than the Federal Reserve.
The loonie was also helped by a Bank of Canada business outlook survey which has found that companies are facing easier credit conditions for the first time in two years. It is expressing greater optimism regarding future projects.