Loonie Struggles to Regain Ground, Likely to Fall Further

Loonie is struggling to regain some of the ground it lost in earlier trading against the greenback. However, there isn’t a lot to support the Canadian dollar right now, and so it is expected to continue to struggle. The Canadian dollar is expected to perhaps drop as far as 85 cents against the US dollar by the middle of 2014.

The Canadian dollar has been struggling to regain ground lost earlier by a combination of factors contributing to a generally lackluster performance. Concerns about the Canadian economy remain in place, as does the acknowledgement that monetary policy in Canada and the United States are divergent right now. It’s also not helping that worries about China and the global economy in general are taking their toll on the loonie.
The loonie has managed to claw back to some gains from earlier, and is mostly higher against its major counterparts. These gains, particularly against the greenback, are not expected to last very long, however. Many analysts expect the Canadian dollar to fall to the 85 cent level against the US dollar by the middle of the year. Until the Bank of Canada starts raising rates again, even higher oil prices will have limited impact.
At 14:04 GMT USD/CAD is down to 1.1169 from the open at 1.1177. EUR/CAD is down to 1.5164 from the open at 1.5264. GBP/CAD is down to 1.8443 from the open at 1.8503.

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