At the end of last week, the Canadian dollar posted its biggest gain since January, thanks in large part to the fact that Canada’s economy grew more than forecast for the second quarter. This pleasant surprise, along with demand for riskier assets and climbing oil prices, are boosting the loonie today.
Today, there is a great deal of rangebound trading taking place. US markets are closed for the Labor Day holiday, and that is slowing many markets around the world. The currency market remains open, but trading is thin and remains within ranges. The loonie, is as a result, heading slightly higher today. It’s not the same increase seen at the end of last week, but the Canadian dollar has an edge.
Oil prices are higher again today, and that is helping. Loonie is supported by oil prices, as oil is Canada’s main export. The support that higher oil prices offer to the Canadian economy is helping the Canadian dollar against the US dollar. Also helping is a little bit of risk appetite, since Ben Bernanke didn’t close the door on more easing for the the United States, and that could further weaken the greenback against other currencies.
At 14:11 GMT USD/CAD is down to 0.9872 from the open at 0.9877. GBP/CAD is down to 1.5677 from the open at 1.5685.
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