Canadian dollar is lower today as risk aversion sets in, and risk currencies lose ground. Loonie is down as investors look for ways to preserve their capital as opposed to seeing big gains. Equities around the world are lower, as are commodities, and that usually correlates with a higher US dollar against high beta currencies.
Canadian dollar is pulling back as jitters in the eurozone affect market sentiment around the world. Loonie is lower against the US dollar as well. Without any major economic releases in Canada, and with better news out of the United States, the greenback has the upper hand.
Also affecting the Canadian dollar is the fact that oil prices are lower today. Oil prices are below $103 a barrel, and some speculate that they could go lower — especially if other countries open their reserves. The loonie is closely related to oil prices, since it is a major oil producer. As a commodity currency, the Canadian dollar is influenced by commodity prices, and oil is the commodity most closely correlated to the loonie.
For now, with equities and commodities down, and with uncertainty over Europe, Forex traders prefer the stability of the greenback to the loonie.
At 14:39 GMT USD/CAD is higher at 0.0061, up from the open at 0.9911. GBP/CAD is higher at 1.5822, up from the open at 1.5771.
If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.