Canadian Dollar Pulls Back on Global Economic Concerns

Even though investors are sending stocks higher, there are plenty of concerns about the economy dragging down some of the high beta currencies, including the Canadian dollar. Loonie is down against the US dollar, heading lower on expectations of a slowing global economy.

Concerns about the crisis in Europe, slowing growth in China, and sluggish recovery in the United States are all weighing on Canada, which relies heavily on exports (especially oil) for its economic support. With the global economy’s future in doubt, demand for Canadian exports is expected to slip, and that is providing downward pressure on the loonie.
It’s not just other countries’ economies that are of concern, though. Statistics Canada reports that factory sales have fallen in Canada for the third time in the last four months. On top of that, there are worries that oil prices could actually fall below $80 a barrel. Even though oil is a little higher today, there are worries about what’s coming, especially if Europe can’t pull things together. So, for now, it’s not much of a surprise that the Canadian dollar is struggling, especially against its US counterpart.
At 14:38 GMT USD/CAD is higher at 1.0235, up from the open at 1.0226. GBP/CAD is higher at 1.5992, up from the open at 1.5915.

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