Loonie Continues to Struggle Along With Oil

Canadian dollar is struggling again today, thanks in large part to continued concern over last week’s surprise rate cut and due to falling oil prices.

Loonie is lower again today, approaching levels not seen since 2009. Last week, citing concerns over economic growth, the Bank of Canada unexpectedly cut interest rates. The news sent the loonie lower as speculation about the state of the Canadian economy rose.
Also weighing on the Canadian dollar is the fact that oil prices continue to fall. Once again, oil prices are approaching the $50 a barrel mark. The loonie is a commodity currency tied tightly to oil prices because Canada is a major oil exporter. When oil prices fall, it impacts the economy. Concerns about oil prices might be one of the reasons that the BOC decided to cut interest rates.
Right now, there isn’t much to support the loonie in Forex trading against its major counterparts. As a result, the Canadian currency is lower pretty much across the board today.
At 14:15 GMT USD/CAD is heading higher, gaining to 1.3016 from the open at 1.2977. GBP/CAD is higher as well, gaining to 2.0250 from the open at 2.0249. EUR/CAD is up to 1.4097 from the open at 1.4055. CAD/JPY is down to 95.5600 from the open at 95.5850.

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