Canadian dollar is softening against the US dollar today, after seeing some earlier gains. Now, though, risk aversion is returning to the financial markets, and loonie is heading lower. Canadian dollar, however, retains many of its gains against the UK pound, which is embattled today.
Loonie saw support earlier today from higher commodity prices. Oil prices, which dipped lower on the news that Saudi Arabia could boost its oil production output, began making a recovery, and that helped the Canadian dollar against its US counterpart. However, things are changing now as focus shifts to Europe and Forex traders become risk averse.
Federal Reserve Chair Ben Bernanke expressed his belief that the European crisis isn’t over yet, and that there are more troubles to expected from the eurozone. On top of that, reports recently released show record borrowing in Britain, and concerns about what’s next for the sterling. With concerns regarding European currencies, the US dollar is popular as a safe haven, and the Canadian dollar is fading.
Even though the data remains relatively solid in Canada (with only minor disappointments recently) there is little clear direction for the loonie to follow.
At 14:26 GMT USD/CAD is higher at 0.9919, slightly up from the open at 0.9916. GBP/CAD is a little lower at 1.5724, down from the open at 1.5726.
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