The Canadian dollar soared to a three-and-a-half year high against the U.S. dollar on Wednesday, briefly reaching US$1.0529, a level not seen since November 2007. Market watchers say high commodity prices and above-forecast inflation figures in Canada are behind the loonie’s surge. A larger-than-expected rise in Canada’s consumer price data released on Tuesday prompted expectations that the Bank of Canada would hike-up interest rates in July. But the Canadian dollar was down against most other G10 currencies, leading one analyst to tell Reuters that the exchange rate move reflects an independently weaker U.S. greenback, rather than a strengthening Canadian dollar.

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