Loonie Hits Fresh Multi-Month High on Oil Rally and Rate-Cut Bets

The Canadian dollar has reached its highest level since June on the back of rising crude oil prices and expectations that the Federal Reserve will cut interest rates next year.

Crude oil futures are trading at around $72 per barrel, up from $68 last week, which is providing a significant boost to the loonie as Canada's economy relies heavily on commodity exports.

The correlation between oil prices and the Canadian dollar is well-documented, with higher oil revenues typically increasing demand for the currency and attracting foreign investment.

The Federal Reserve rate-cut bets are also contributing to the US dollar's weakness, with a 72% probability of a 25-basis-point cut at the March meeting, up from 58% last month.