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Loonie’s Rally Ends on Oil Drop

March 19, 2010 at 6:15 by Jan Baros

Canadian DollarThe pessimism returned to financial markets today as European economic problems made the headlines once again in most financial websites this Thursday. Markets that influence the loonie, as the crude oil and other raw materials slid, affecting also the loonie’s advance.

The Canadian dollar ended today its longest winning streak in more than five years and pessimism rose in Europe, spreading later on to a global scale, which affected appeal for stocks and commodities in North America, markets with strong correlation with the loonie rates, making Canada’s currency to step back towards parity with its U.S. counterpart.

The positive aspect of today’s retreat for the loonie, is that after such a strong advance, it wasn’t the Bank of Canada which forced its currency down with statements or concrete measures to halt its rally, but, in fact, fundamental aspects of the international market scenario were behind the loonie’s drop today, signaling that for the moment, the nation’s central bank is not again its currency strong levels.

USD/CAD traded at 1.0166 as of 03:53 GMT from as low as 1.0071 this Thursday.

If you have any questions, comments, or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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