The Canadian dollar broke above 82.90 cents U.S. early Wednesday, hitting the highest level against its American counterpart since May 2015.

A combination of commodities strength and persistent U.S. dollar (USD) weakness has sent the loonie 5.6 per cent higher against the greenback over the course of this year, with the Canadian dollar posting the best return among all G10 currencies.

That Canadian dollar strength may not disappear any time soon, according to Scotiabank Chief FX Strategist Shaun Osborne. In a note to clients Wednesday, Osborne said the rapid rise in commodity prices should help keep the loonie near these lofty heights.

“Slightly firmer crude oil and steady yield spreads helping support sentiment against a generally firmer USD,” he said.

“Trend signals remain bearishly-aligned against the USD and this situation suggests limited upside potential for the USD and ongoing downside risk.”

A whole host of commodities, including copper and grains, are trading at multi-year highs, while West Texas Intermediate crude oil hovered around US$66 per barrel Wednesday morning, near its highest level since 2018. The Canadian dollar has traditionally been considered a commodity currency, due to the reliance of the domestic economy on the commodity trade.

Also playing into the equation are some divergent signals on the pace of rate increases in Canada and the United States. Bank of Canada Governor Tiff Macklem has opened the door to a potential rate increase in the second half of 2022, while U.S. Federal Reserve Chair Jerome Powell has repeatedly indicated it’s unlikely the Fed will hike before 2023.