Canadian dollar is gaining against the US dollar right now, receiving a boost on general optimism today. Loonie is getting help as investors find optimism after Alcoa earnings, and on the fact that oil prices are heading higher.
Yesterday, there was a lot of gloom on the market as concerns about the eurozone overshadowed just about everything. High beta currencies retreated; commodity currencies couldn’t find support. Today, though, that has largely changed. Alcoa earnings have sparked optimism, and that means that there is a greater demand for riskier assets — and that includes the Canadian dollar.
Also supporting the loonie is the news that oil prices are on the rise. Optimism is helping oil prices, as is the latest inventory report for the United States. The latest inventory report showed that there was a rise in stockpiles, but the increase wasn’t as steep as what’s been seen lately. This news has sparked hope that Americans might be ready to use more oil again.
As a commodity currency tied to oil, higher oil prices (above $102 a barrel now) help the Canadian dollar, especially against the US dollar.
At 14:48 GMT USD/CAD is lower at 1.0017, down from the open at 1.0044. GBP/CAD, though, is higher at 1.5938, up from the open at 1.5932, thanks in large part to the support UK pound receives from higher equities around the world.
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