Canadian Dollar Gets Boost on Forex Market Optimism

Canadian dollar is getting a boost today, rising against the US dollar on optimism about what’s next for the eurozone. With the expectation of a deal announced by EU leaders on Wednesday, the Forex market is showing a return to risk — at least for now.

Earlier, the loonie moved higher against the euro, but now the euro has the upper hand in that pair. The Canadian dollar remains solidly up against the US dollar, though, and higher against the UK pound. Inflation in Canada also increased, and that has many speculating about tomorrow’s Bank of Canada interest rate decision. While the bank is likely to keep interest rates the same, there is some anticipation regarding what the BoC leaders have to say about the economy, and coming economic policy.
Also helping the Canadian dollar in Forex trading is the fact that oil prices continue to advance. Canada’s economy, and its currency, is tied to oil, which is a major export. With oil prices on the rise — heading toward $90 a barrel — support for the loonie is apparent. The Canadian dollar is likely to see some strength, especially relative to the US dollar, for some time.
At 15:26 GMT, USD/CAD is lower, at 1.0026, down from the open at 1.0096. GBP/CAD is also lower, moving to 1.6027, from the open at 1.6090. EUR/CAD is higher, though, up to 1.3972 from the open at 1.3957.

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