The Canadian dollar, which gained sharply versus the greenback on the beginning of the week, plunged since yesterday as Dubai World, a government owned investment company is trying to delay its debts payments, bringing risk aversion to high levels in
Optimism in markets declined since Dubai tried to reschedule its debts payments, affecting risk appetite and specially commodities and stocks throughout the world, which are highly influential for the Canadian dollar’s performance, paring all its previous days’ advances and is heading for a weekly loss versus its U.S. counterpart. The crude oil barrel fell to as low as $72.50 dollars after trading near $80 earlier this week, causing an important impact on the loonie, since the energy commodity is one of Canada’s main exports having the U.S. as its destination, allowing the greenback correct previous losses versus its Canadian counterpart and also other currencies from commodity exporter nations around the world.
Not only international pessimism affected the loonie today since a report showed a rise in the current account deficit, making basically everything to force the Canadian currency down, according to specialists. The events regarding Dubai’s debt will play a major role in risk aversion levels, eventually setting the loonie further down in the short term.
USD/CAD traded at 1.0734 as of 14:09 GMT from a previous rate of 1.0576 in the intraday, showing high volatility for the CAD this week. CAD/JPY declined to 80.73 from 81.61.
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