The outperforming U.S. economy, which is pushing U.S. yields higher — well above yields in Canada — is attracting more investments south of the border. There’s also a widening differential in monetary policy between the Bank of Canada and the U.S. Federal Reserve, Schamotta said.

The Canadian dollar rose against the greenback for three straight days even as the currency faces the perfect storm. The USD/CAD pulled back to 1.4350, down from the year-to-date high of 1.4466. Perfect storm for the loonie The USD/CAD pair has soared by almost 20% from its lowest level in 2020,