The Canadian dollar is trading at its highest level since Nov. 16, 2007, Tuesday, at 103.06 cents (U.S.).
Meanwhile, the Bank of Canada will announce its interest rate policy at 9 a.m. ET. The central bank is expected to leave its key overnight target rate at one per cent.
Senior CIBC economist Avery Shenfeld cautions that Bank of Canada Governor Mark Carney is starting to feel pressure to raise interest rates.
"With the economy doing well, the justification for keeping interest rates this low is rapidly disappearing, so expect a rate hike some time this spring," Shenfeld told reporters.
He also warned that we could see "the overnight rate of interest going from 1% to 2% and floating-rate mortgages then basically also rising by a percentage point over the course of now to the end of the year."
Shenfeld also said that if oil prices keep rising, the loonie could reach $1.05 U.S. in short order.
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