Canadian dollar is looking to regain some ground, but some of the gains against major counterparts may not last. Loonie is struggling a bit, thanks to “valuation fatigue”, and that could mean a lower Canadian dollar in the near term.
According to Societe Generale, the Canadian dollar is likely experiencing “valuation fatigue”, and that is weighing on the currency to some degree. While this state of affairs might weigh on the loonie in the near future, for now the currency seems to be showing some strength.
Following the G-7 pledge to avoid a currency war, the loonie dropped. However, the Canadian dollar is looking to regain some ground, and is higher against the US dollar and the UK pound right now — although it is lower against the euro.
“Valuation fatigue” may be a factor, though. The Canadian dollar has seen quite a bit of strength in the last couple of years, and that might work against it in the near future, especially as there are signs that the Canadian economy is slowing down.
At 14:29 GMT USD/CAD is down to 1.0038 from the open at 1.0048, and well off the session high of 1.0089. EUR/CAD is up to 1.3511 from the open at 1.3471. GBP/CAD is down to 1.5706 from the open at 1.5737, and off the session high of 1.5770.
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