Loonie Pares Some of Its Losses Against the Greenback

Canadian dollar dropped earlier in trading as the news about US retail data caused a general pull back for riskier currencies. Since the United States is a major trading partner, the news about retail sales was a bit of a blow for the loonie. However, some of the losses have been pared as oil prices top $101 a barrel and as the ZEW shows hope for the eurozone economy.

Loonie is struggling back up toward parity with the US dollar today, paring some of its earlier losses. US retail sales showed only a 0.4% increase last month, instead of the 1% increase forecasted by analysts. The result was a drop for the Canadian dollar.
Since that result, though, loonie has been struggling to regain some of the losses. Higher oil prices should help the Canadian dollar, which is sensitive to changes in oil prices because oil is Canada’s largest export. Also helping is the improved mood in Europe, as evidenced by the latest release from the German ZEW. Another loonie-positive move was large fund purchases of the Canadian dollar against the Japanese yen.
At 15:46 GMT USD/CAD is higher at 1.005, up from the open at 1.003. CAD/JPY is up to 78.37 from the open at 77.49. GBP/CAD is down to 1.5672 from the open at 1.5738.

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