The Canadian dollar rose today on the speculation that the tax reduction in the US, the biggest trading partner of Canada, would bolster the economic growth.
The US President Barack Obama decided to prolong the reduction of the taxes, which were set to increase on December 31st. The housing starts in Canada increased to 187,200 in November (seasonally adjusted) from 167,800 in October. The median forecast was 174,000. Canada’s government bonds declined 1.1 percent this month
Some fundamentals still may provide the downward bias for the Canadian currency. Such factors include the concerns about the European debt and the tension among Koreas, which negatively influence the economic growth and the currencies related to it.
USD/CAD went down from 1.0123 to 1.0111 as of 17:54 GMT after it reached the intraday low of 1.0063. The currency pair currently tends to rise. EUR/CAD dropped from 1.3424 to 1.3362, following the decline to 1.3340.
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