Economic Data Helps Loonie

Canadian dollar is benefiting from improved sentiment today. A general feeling of risk appetite has returned to the Forex market, thanks to encouraging economic news out of the United States and Germany. Loonie is also finding some support against the US dollar as a commodity currency, with oil prices on the rise.

Good news about the German Ifo is providing some risk appetite right now. Business confidence, as measured by the Ifo, rose to 109.6 from January’s 108.3 level. This news represented an increase that surpassed the expected rise to 108.8.
Stable news out of the United States is also helping risk appetite, and high beta currencies like the loonie. Canadian dollar is gaining as its biggest trading partner shows signs of economic improvement. Housing market data is showing an improvement in the United States, and the latest employment reading shows jobless claims holding steady.
In Canada, there are some concerns about the economy, but support for commodities is helping the loonie. Loonie is very connected to oil prices, and those prices topped $107 a barrel, before pulling back a little bit. Oil prices are still higher on the day, and that is providing support for the loonie, as are the higher gold prices.
At 14:01 GMT USD/CAD is down to 0.9991 from the open at 1.000, breaking through the parity level.

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