The Canadian dollar rallied today versus several currencies and specially against its U.S. counterpart, as stocks and commodities climbed worldwide after the Group of 20 affirmed that is relaxed policy to stimulate the world economy will be extended, increasing risk appetite in trading markets.
Canada is one of the most commodities and stocks linked currencies, as the country is a main exporter of its natural resources surplus specially to its neighboring U.S., which has a much higher demand for energy than Canada. Today, stocks and commodities rose sharply after the G-20 affirmed that its measures to stimulate the global economy will continue to be a part of the group’s policy to the process of global economic recovery, providing support for the loonie to rose versus most of the 16 main traded currencies, and specially versus the greenback, gaining almost 2 percent as the U.S. currency fails to remain attractive as risk appetite is on the rise.
Even if the Bank of Canada affirmed in multiple occasions that a strong loonie is an obstacle for the nation’s economic recovery, analysts indicate that the scenario is so favorable for the Canadian dollar, that it will be hard to stop it to grow further, specially versus its U.S. counterpart, as optimism is driving the commodities prices up constantly.
USD/CAD traded at 1.0566 as of 16:43 GMT from a previous rate of 1.0727 yesterday.
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