Canadian dollar is getting a boost in Forex trading today, heading higher as oil prices rise, and at the prospect of more quantitative easing in Europe, as well as stimulus in China. With other currencies on the verge of weakening in the name of economic stimulus, the loonie is well placed to make some gains.
Higher oil prices are one of the biggest helps to the Canadian dollar today. Loonie is a commodity currency tied to oil prices. Oil is Canada’s major resource and a major export, and higher oil prices often support the Canadian dollar. Concerns about Iran’s possible embargo, and the possibility that the country will attempt to shut down the Strait of Hormuz, are also contributing to higher oil prices.
Also helping the loonie is the fact that other countries are considering economic stimulus measures. The ECB is expected to cut interest rates later this week, as is the BOE. Attempts to stimulate the eurozone economy, and the British economy, are likely to weaken those currencies. Also, the news that China might decide on stimulus is also providing a boost for the loonie, which didn’t see a lot of the same problems that plagued the rest of the world economies during the recent recession.
At 13:56 GMT USD/CAD is down to 1.0140 from the open at 1.0171. GBP/CAD is down to 1.5917 from the open at 1.5962.
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