The Canadian dollar, which benefited from a high on crude oil markets and traded near parity with its U.S. counterpart witnessed a significant fall towards the end of these week’s session as equities did not perform in favor of the Canadian currency.
The loonie is ranking among the top winners versus the greenback this year, only losing to the Australian dollar and the Brazilian real, being all these currencies benefiting from a high in commodity markets, due to their raw material exporter profile. This week, the loonie managed to trade near parity with the U.S. dollar, but this Friday, a reverse movement in stocks worldwide created a rather bearish scenario decreasing risk appetite in currency trading, pushing the loonie away from equality with the greenback, as investors shifted their bets before the session’s closing.
Optimism towards the U.S. economy and speculations that the greenback would be undervalued, combined with a negative performance in stocks and commodities forced the Canadian currency down towards the end of this week, according to analysts. The Canadian dollar is likely to remain in this band between parity with the U.S. dollar and up to $1.05 for a while, as long as there are no events that would drastically change the sentiment towards the currencies involved.
USD/CAD traded at 1.0430 as of 12:25 GMT from 1.0305 yesterday, after trading near parity in the middle of the week.
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