Canadian dollar is weaker today, following yesterday’s somewhat surprising surge. There are some factors supporting the loonie in the short to medium term, so the currency might get another chance later.
Yesterday, the loonie popped a bit against its major counterparts. Today, the currency appears to be weakening against those currencies. Oil is down again (although it remains in the mid-50s per barrel), and some Forex traders might be profit taking.
There are some hopes for better performance from the Canadian dollar. Many Forex traders expect the lackluster economic news out of the United States to push back hopes for an interest rate hike, which would mean less policy divergence between the United States and Canada. Additionally, there is still an edge in the eurozone regarding Greece that could help the loonie. After the loonie gets over this current hump, it might see some strength in the near to medium term.
Long-term, though, it is unclear whether or not the Canadian dollar can sustain any gains against its major counterparts — especially with oil prices continuing to drop overall.
At 10:57 GMT USD/CAD is up to 1.2061 from the open at 1.2033. EUR/CAD is higher as well, moving up to 1.3269 from the open at 1.3213. GBP/CAD is up to 1.8520 from the open at 1.8457.
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