Loonie Advances on Rising Oil Prices and European Rescue Plan

The Canadian dollar gained today after crude oil prices went up and the European policy makers came out with the loan package for the indebted countries of the region, improving the investors’ confidence and making them more willing to risk.

European Union’s governments are ready to provide €750 billion ($960 billion) to support the Euro-zone economy. The Canadian currency was boosted by the increasing number of the housing starts and the widening trade surplus. The Canada gains about half of the exports’ profits from the raw materials, therefore rising oil prices, which advanced 4.5 percent to $78.51 per barrel on the New York Mercantile exchange, were also supporting to the currency.

The currencies tided to commodities, like Canadian dollar, were the best performers recently. The experts predict that this trend should remain, at least in the near term. However, in the light of the currency markets volatility some unexpected moves are possible.

USD/CAD traded near 1.0246 as of 18:58 GMT today after opening at 1.0313. EUR/CAD traded at about 1.3112 down from the opening level of 1.3335. AUD/CAD traded at 0.9235.

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