TORONTO, Jan 23 (Reuters) - The Canadian dollar rallied to its highest level in over a week on Friday afternoon as a rally in prices for key Canadian exports like oil and gold helped support the currency.
By mid-afternoon, the Canadian dollar had rallied as high as C$1.2267 to the U.S. dollar, or 81.52 U.S. cents, which marked the domestic currency's highest level since Jan. 14.
The key drivers behind the Canadian dollar rally was a more than 4 percent surge in gold prices to break above the $900 an ounce level and a 6 percent jump in oil prices given mounting evidence that OPEC is complying with the bulk of its record output cuts
While the Canadian currency has since backed off from its session high, its ability to stick comfortably higher took some currency experts by surprise given the weakened state of the global economy and the likely drop in demand for commodities.
"The resiliency of this move was somewhat shocking given the backdrop that's going on," said David Watt, senior economist at RBC Capital Markets. "The global economy still doesn't look like it's at a great stage for commodity currencies to do spectacular."
By 3:30 p.m. (2030 GMT), the Canadian unit was at C$1.2359 to the U.S. dollar, or 80.91 U.S. cents, up 1.4 percent from C$1.2537 to the U.S. dollar, or 79.76 U.S. cents, at Thursday's close. (Reporting by Frank Pingue; Editing by Jeffrey Hodgson)
Our Standards: The Thomson Reuters Trust Principles.