Loonie Higher Against the US Dollar on Risk Appetite

Canadian dollar is higher against the US dollar today as risk appetite makes an appearance. Loonie is gaining ground as fiscal cliff talks are set to resume in the United States. Additionally, the Canadian dollar is getting some help from higher oil prices.

Even though a deal still hasn’t been reached regarding the fiscal cliff in the United States, many expect that such a deal will be struck before the end of the year. Additionally, the fact that the United States is expected to hit its debt ceiling on December 31, according to Treasury Secretary Timothy Geithner, is not causing risk aversion. Right now, the mood is hopeful, and that is benefitting high beta currencies like the Canadian dollar.
Loonie is also getting some help from oil prices. The price of crude has moved above $91 a barrel today, and that is providing some support for the Canadian dollar. Oil is among Canada’s major exports, and its currency often moves the same direction as oil prices. With oil on the rise, it is little surprise that the loonie is gaining as well.
At 13:55 GMT USD/CAD is down to 0.9923 from the open at 0.9942. GBP/CAD is up to 1.6049 from the open at 1.6046. EUR/CAD is up to 1.3178 from the open at 1.3140.

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