Canadian dollar has moved lower as uncertainty about what Federal Reserve Chair Ben Bernanke will say about the US dollar, and the US economy, tomorrow at the central banker symposium in Jackson Hole, Wyoming. Questions about what’s next are weighing on risk appetite, and that isn’t helping the loonie in currency trading.
Loonie tends to do well in an environment of risk appetite and certainty. With the uncertainty surrounding tomorrow’s Jackson Hole speech and the assessment of the economy, the Canadian dollar is losing ground as Forex traders look for something with a little more safety. Rumors are that the Fed won’t make a move in September, and that Ben Bernanke’s remarks could reflect that. Additionally, his remarks may not point to quantitative easing, which would weaken the US dollar. If the greenback has the chance to remain strong, that would continue to weigh on the loonie.
Also, it’s not helping the Canadian dollar that oil prices have been easing. Since Tropical Storm Isaac has moved from threatening oil operations in the Gulf of Mexico, and with predictions that the damage won’t be as bad as previously expected, oil price have come down a bit, and that means that one of the supports underpinning the Canadian dollar is weakening.
At 13:22 GMT USD/CAD is up to 0.9908 from the open at 0.9895. GBP/CAD is up to 1.5713 from the open at 1.5667.
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