The Canadian dollar dipped on Thursday against the US greenback after record highs yesterday. This is despite commodity prices staying strong. The possibility of more interest rate hikes from the Bank of Canada is also supportive of the loonie. An increase in rates will reduce the US-Canada rate gap.

Canada’s overnight interest rate is currently at 3.5 percent while that of the US is at 4.5 percent. The Canadian central bank will make the next announcement on interest rates in March. No major economic data is due this week in Canada. Bond prices, meanwhile, dropped on Thursday. Reuters reports:

“We'll be watching the commodity prices again for the next little while in terms of direction for the Canadian dollar,” said Carolyn Kwan, markets economist at Scotia Capital. “We've gone through now C$1.14 and we're in a new range again.”