Canadian Dollar Up High on Oil Rally

The loonie, as the Canadian currency is nicknamed for the image of the waterfowl on the C$1 coin, started the year gaining versus most of the 16 main traded currencies as its chief export, the crude oil, advanced further, naturally forcing the Canadian correlated currency up in foreign-exchange markets.

After the crude oil traded above $81 dollars for the first time since November, the Canadian dollar advanced significantly specially versus a less attractive U.S. dollar, as traders abandoned greenback-priced positions to invest in higher-yielding markets correlated with commodities, in a day were stock markets advanced specially in Asia, as China produced another positive manufacturing report, bringing optimism regarding the economic recovery in a global scale for the starting year. The greenback lost not only versus the loonie but against all of 16 main traded currencies.

The Canadian dollar had a significantly good performance in the ending weeks of 2009, and the factors behind this rally, commodities and stocks, are still boosting appeal for the Canadian dollar, which may start to raise concerns from the nation’s central bank, which has a rather conservative position towards the currency’s high rates.

USD/CAD traded at 1.0382 as of 15:35 GMT from a previous rate of 1.0511 yesterday when markets opened. CAD/JPY touched 88.94 from 88.56.

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