Earlier, the Canadian dollar was gaining on the demand for riskier assets. Yesterday’s demand for higher yielding assets helped the loonie gain versus its counterparts. However, some of that momentum is being lost right now as a bit of risk aversion sets in.
Canadian dollar has been strengthening against currencies like the euro and the Great Britain pound recently, gaining as the US economy shows signs of recovery. With 3/4 of Canada’s exports going to the United States, an economic recovery would benefit Canada — and the loonie. The US dollar is likely to retain some of its strength against the Canadian dollar, but other majors are likely to move lower against the loonie.
The loonie is likely to remain strong against struggling European currencies, especially since focus remains on troubles across the Atlantic. Today, though, the Canadian dollar is backtracking a little bit. While still higher than the open against many of its counterparts, loonie is losing some ground as risk aversion sets in and as oil prices head a little bit lower.
At 13:23 GMT USD/CAD is at 1.0168, down from the open at 1.0178. EUR/CAD is at 1.2918, gaining some ground, but lower than the open at 1.2973. GBP/CAD is also lower at 1.5648, down from the open at 1.5740. CAD/JPY is up to 75.67, higher than the open at 75.48.
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