The loonie posted significant gains versus the U.S. dollar as the crude oil continued to advance and optimistic speculations about the world economy brought stock markets up.
Canadas dollar posted the highest gains in 59 years during the previous month thanks to a rebound in commodity prices and relatively to that, in the equities market. After a correction movement in the beginning of June making the loonie to lose 2.2 percent against the U. S. Dollar, it continued to strength, as stocks rebounded this Monday in North American markets. A domestic housing starts report also pushed the Canadian currency up, as the numbers were beyond the expectations of most specialists with an annualized total of 128,400 units in May compared to 117,600 in the previous month, helping investors confidence to improve, considering that the real estate market was one of the most problematic sectors affected by the credit crunch last year.
The main reason behind the loonies rally is the incredible and unexpected performance seen in the stock markets since the first signs of economic recovery started to appear in Asia. Canada is a main commodity exporter, and as the demand for oil rose combined with a growing attractiveness for
USD/CAD fell to 1.1084 from a previous price of 1.1245.
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