TORONTO — The Canadian dollar strengthened to 80 U.S. cents for the first time in more than a year amid mounting evidence the economy is gathering speed and expectations the central bank will continue tightening monetary policy.

The loonie strengthened 0.2 per cent to 79.93 U.S. cents at 10:32 a.m. in Toronto after touching 80.10 cents earlier, it’s highest intraday level since May 2016. The Canadian dollar hasn’t closed above 80 cents US since June 30, 2015. 

Analysts are eyeing 80 cents, as a key barrier for the Canadian dollar.

The currency is trading at its strongest in 14 months, helped by a hawkish turn from the Bank of Canada and an interest rate hike earlier this month.

The central bank hiked its key interest rate on July 12, its first rate increase since 2010.

Canadian wholesale trade data Monday also beat expectations, oil prices moved higher and the greenback struggled to shrug off soft data and political uncertainty.

The loonie has gained some 10 per cent since early May, while the spread between yields of Canadian and U.S. 2-year bonds has narrowed sharply since June and now sits at less than 10 basis points, its narrowest in more than a year.

Prices for oil, a major Canadian export, rallied after leading OPEC producer Saudi Arabia pledged to cut its exports to help speed up the rebalancing of global supply and demand.

Canada wholesale trade rose more than expected in May, driven by increased sales of motor vehicles and agricultural supplies, data from Statistics Canada showed.

Canadian government bond prices were lower across the maturity curve, with the two-year price down 2
Canadian cents to yield 1.261 per cent and the benchmark 10-year falling 13 Canadian cents to yield 1.900 per cent.

With files from Canadian Press, Reuters and Bloomberg