Canadian Dollar Fluctuates Ahead of ECB Policy Decision

The Canadian dollar fluctuated before the European Central Bank monetary policy meeting today and the summit of the European leaders on Friday. Yesterday, the currency closed almost unchanged.
The Forex traders were caught between mixed emotions. On one hand, the signs of the disagreement between France and Germany regarding the way out of the crisis are negative for the Canadian currency. On the other hand, the ECB is expected to slash its interest rates on today’s meeting and that is considered to be positive for the European economy and, as a result, to the currencies with higher yield and higher risk. The falling prices for crude oil, the key export of Canada, were negative for the loonie. Crude dropped 0.6 percent to $100.55 a barrel on NYMEX.
It’s not surprising to see the Forex market a bit choppy ahead of the summit on Friday. The meeting of the European chiefs can have a great impact on the future and traders are reluctant to make decisions before such an important event. It’s true that same hopes were for other summits, but Europe is nearing a deadline after which talks and empty promises won’t be enough to keep the region going forward, so this time an absence of a result would be a result itself and very bad one.
USD/CAD was near its opening of 1.0095 today as of 5:24 GMT. EUR/CAD was down from 1.3538 to 1.3533, while earlier it reached 1.3520 and yesterday’s low was 1.3500 — the lowest level since September 20. CAD/JPY declined from 76.88 to 76.85.

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