Canadian Dollar Near 2-Month High on Oil

The Canadian dollar returned to gain today as its chief export, the crude oil, rallied as demand for energy increases, favoring currencies with a similar profile in foreign-exchange markets as the Australian dollar, which is a main commodity supplier for China.

The loonie, as the Canadian dollar is often referred, had the fourth day of advances in this week as the crude oil returned to trade high in commodity markets closing future contracts near $ 83 a barrel, helping the Canadian dollar to rally specially versus its U.S. counterpart as frustrating employment data declined attractiveness for the greenback during most of today’s session in North America. Commodity’s strength are pushing a new rally for the loonie which may eventually climb towards parity with the U.S. dollar, as long as this market scenario remains the same.

The Canadian dollar has being one of the most attractive currencies in the beginning of 2010 as its correlation to commodities and equities markets has been fueled the loonie’s rally since last December. The loonie may touch parity with the U.S. dollar in the following weeks if the Bank of Canada doesn’t intervene on its rally with statements or actual measures.

USD/CAD closed today at 1.0293 from a previous intraday rate of 1.0348. CAD/JPY remained neutral after high volatility at 89.94.

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