Loonie Declines vs. Greenback, Remains Strong vs. Majors

The Canadian dollar weakened versus its US counterpart as the problems in Europe and prospects of slower economic growth in China made the US currency more preferable to the Canadian one.



Italy is now yet another country that may require help from its European peers, while Greece still undermines confidence in the future of the Eurozone. In such an unfavorable environment growth-related currencies usually retreat, making safe currencies, like the US dollar and the yen, more attractive. Yet the loonie is holding relatively well and posted gains against 10 of 16 major currencies.

Tom Levinson, a foreign-exchange strategist at ING Bank NV, made comment about the loonie’s performance:

With Canada, they’re kind of brushing off this labor report in the US, whereas everywhere else seems to have reacted pretty negatively to it. We still take the view that US data will steadily improve throughout the rest of this year and that will contribute to better prospects for Canada as well.

Some analysts believe that the robust jobs market and growing inflation in Canada will prompt the nation’s central bank to raise its interest rates sooner than was previously expected.

USD/CAD traded near 0.9721 today as of 3:01 GMT after rising yesterday from 0.9612 to 0.9685. CAD/JPY dropped from 83.68 to 82.41 on the previous trading session before trading at about 82.42 today. Meanwhile, EUR/CAD traded at fell from 1.3589 to 1.3554 and reached the low of 1.3524, the lowest intraday price since March 14.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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9:16 AM | 0 comments

Canadian Dollar Rebounds vs. Greenback on Stocks & Oil

The Canadian dollar gained versus the US dollar today, after reaching yesterday the lowest level in more than three months, as crude oil slowed its decline and stock advanced.
Futures for delivery of crude oil in August slumped as much as 1.7 percent to $89.61 per barrel in New York, before rebounding to $90.81 a barrel, resulting in the 0.4 percent loss. The Standard & Poor’s 500 Index gained 0.9 percent, the first advance in four days. The MSCI World Index climbed 0.5 percent.
The US and Canadian policy makers decreased their growth forecasts, reducing bets that the Bank of Canada will raise its interest rates next month. The negative expectations lead the Canadian currency to the potential monthly decline by 1.8 percent, following the drop by 2.4 percent in the previous month.
USD/CAD dropped to 0.9850 from 0.9858 today as of 1:51 GMT after it jumped yesterday to 0.9911, the highest level since March 17. EUR/CAD traded near 1.4093, following the advance on yesterday’s session from 1.4000 to 1.4086. CAD/JPY traded at 81.93 after it climbed yesterday from 81.32 to 81.97.
If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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3:00 AM | 0 comments

Canadian Dollar Flat After Decline, Gains vs. US Dollar June 24th, 2011

The Canadian dollar traded sideways after it fell yesterday as crude oil declined on the Federal Reserve cut its US growth forecast. The currency attempted to rally against the US dollar.

Crude oil dropped after the International Energy Agency announced its plan to release oil from its strategic reserves and on prospects of higher output from Saudi Arabia. August futures for delivery of oil fell to $5.72 to $89.69 per barrel in electronic trading, before climbing to $92.35. MSCI World Index slumped 1.4 percent.
The loonie attempted to gain versus the greenback on rumors that the European leaders approved Greece’s austerity plans. Renewed hopes for a positive resolution of the European debt issues helped the Canadian currency to stop its drop against the yen, but haven’t helped to gain much.
USD/CAD fell today to 0.9781 today as of 4:36 GMT after rising yesterday from 0.9735 to 0.9787. EUR/CAD traded near 1.3949, following the drop from 1.3978 to 1.3952. CAD/JPY traded at about 82.25 after previous session’s decline from 82.41 to 82.21.
If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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7:07 AM | 0 comments

Canada’s Dollar Fluctuates After Carney Statement June 23rd, 2011

The Canadian dollar fluctuated after the dovish statement of the Federal Reserve and the speech of Mark Carney, Bank of Canada Governor. The speech of the Governor left mixed feelings, while the Fed statement was moderately negative for the currency.

Crude oil, the biggest export of Canada, dropped $1.11 to $94.30 per barrel on NYMEX after the Fed released its statement. Earlier, crude gained by $1.24 to $95.41 as the US stockpiles declined.
Carney was quite pessimistic about Canada’s economic growth in the near future in his statement:

In the short term, economic growth in Canada is expected to slow to modest rates, due to a number of temporary factors. These include the supply chain disruptions that will dampen automotive production, as well as the drag from adjusting to higher energy prices on consumer spending in Canada and the United States.

Looking further ahead, the Governor was more optimistic, saying:

The Bank expects a re-acceleration of growth in the second half of the year, consistent with a renewed narrowing of the output gap.

USD/CAD traded at 0.9727 today as of 00:17 GMT, falling after yesterday’s jump from 0.9710 to 0.9736. EUR/CAD slipped from 1.3978 to 1.3932. CAD/JPY rose to 82.65 after it fell on the previous trading session from 82.54 to 82.41.
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9:01 AM | 0 comments

Loonie Gains vs. Greenback on Fundamentals, Falls vs. Euro

The Canadian dollar advanced versus the US dollar on the good outlook for today’s Canadian macroeconomic reports, while fell against the euro as promises of resolution of the Greek crisis bolstered Europe’s shared currency.

Analysts estimated, before the report from Statistics Canada, that the Canadian retail sales rose 0.6 percent in April. The core retail sales increased 0.5 percent, following the drop by 0.1 percent in April. The growth of the leading index was estimated to be 0.6 percent in May, following the growth by 0.8 percent in the month before.
Despite talks about resolution of the Greek debt problems, the optimism for the European economy, as well as the global economy, can evaporate very quickly unless some real progress in the battle with credit issues would be evident. The euro’s strength is already waning. The loonie can gain versus the 17-nation currency, but by the same token can weaken versus “safety currencies”, including the greenback.
USD/CAD dropped from 0.9797 to 0.9788 todays as of 2:19 GMT. EUR/CAD traded at about 1.4030 after it jumped from 1.4015 to 1.4065.
If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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7:57 AM | 0 comments