Dollar Rise Probable

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    There is a reasonable probability that the Canada dollar can rise somewhat from today’s levels, says RBC Dominion Securities Inc. Its ‘Harbour Group Market Notes’ show the Canadian dollar had been in a broad range for the past three years, trending between US$0.95 and US$1.05, but has recently broken through $0.95 to a three year low. Longer term, it advocates increasing U.S. dollar exposure. U.S. economic growth looks poised to pick up and U.S. monetary policy is shifting toward fewer bond purchases while Canadian policy is likely to remain unchanged at best. From a risk management perspective, a position in U.S. dollars has historically acted as an effective hedge to equity market volatility.