Canada’s Dollar Ends Week with Big Gain

The Canadian dollar ended this week with a big gain as the optimism caused by the G20 meeting and the good fundamentals in the US helped the currency to attract attention of investors that looked for higher yield.
The G20 meeting has started yesterday in Paris. The leaders of the Group of Twenty gathered to discuss the debt problems of Europe and a way to deal with them. Investors put high hopes on this meeting and the resulting risk appetite spurred stocks, commodities and riskier currencies. The MSCI World Index jumped as much as 1.5 percent. Crude oil, Canada’s key export, rose 3.2 percent to $87.28 per barrel in New York.
The set of good data from the US was also positive for the loonie (as the Canadian currency is nicknamed). The US economy is important for Canada’s currency as Canada sells most of its goods to its southern neighbor. The increasing retail sales, the growing import and export prices and the shrinking federal budget deficit improved the outlook for the economy of the United States.
USD/CAD slid from 1.0208 to close at 1.0096. EUR/CAD fell from 1.4062 to 1.4013 and dropped intraday to 1.3964. CAD/JPY jumped from 75.28 to 76.40.

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