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“The Canadian dollar is all about oil,” said Jennifer Vail, head of fixed-income research in Portland, Oregon at U.S. Bank Wealth Management, which oversees about $125 billion. “Monetary policy, growth outlook, inflation outlook — all of those are certainly a component of the Canadian dollar, but the primary driver remains oil.”

The 120-day correlation between Canada’s currency and oil has climbed to 0.67, up from 0.52 four months ago, according to data compiled by Bloomberg. A reading of 1 implies two markets trade in lockstep.

As recently as December, the Canadian dollar and crude were the most highly correlated among all major currencies and their country’s key commodity export. While the loonie’s link to the commodity has since been topped by the Russian ruble, it’s still more closely associated to oil than Mexico’s peso or Norway’s krone, and more than Brazil’s real is to soy beans, or Australia’s dollar to iron ore.

No Group of 10 currency has been a better performer than Canada’s during the past three months. The loonie hit 79.97 US cents Friday morning, up 16 per cent from its Jan. 19 low for the year. Crude oil ended at $47.92 a barrel, up 67 percent during the same period.

The currency’s Sharpe ratio, which measures returns adjusted for price swings, shows the Canadian dollar had the best results among 16 major currencies tracked by Bloomberg in the span. Citigroup Economic Surprise Indices show Canada is second best behind Switzerland based on above-forecast economic reports. The benchmark Standard & Poor’s/TSX Composite Index of Canadian stocks has gained almost 7 per cent this year.