Canadian Dollar Bullish on Oil Rates, To Gain in 2010

As the crude oil, Canada’s main export to the U.S., continued to climb today, the Canadian currency traded high versus most of the 6 majors currencies, as the loonie’s outlook remains among the best bets for 2010 in foreign-exchange markets.

The Canadian dollar outlook remained attractive this week as the crude oil advanced for a third straight day, providing support for the loonie, to gain versus the euro and the pound, and to a lesser extent, versus its U.S. counterpart. After an improving jobless claims report was released in the U.S., the loonie’s rally was partially halted, making the greenback to pare some of its losses versus the Canadian currency as optimism towards the U.S. economic recovery surged after one day of pessimism as housing data frustrated traders yesterday.

Raw materials are responsible for near half of Canada’s exports, and the outlook for the loonie is extremely appealing as the U.S. economic recovery in 2010 is likely to boost demand for Canadian exports, helping the loonie to gain versus currencies with a similar profile, as the Australian dollar.

USD/CAD traded at 1.0500 as of 18:23 GMT from a previous rate of 1.0524 in the intraday.

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