Canadian Dollar Bullish Versus U.S. Counterpart

The Canadian dollar had a second week of gains versus its U.S. counterpart specially as risk appetite rose this Friday as major European economies posted a quarterly economic growth, favoring commodity exporter countries currencies like the loonie in foreign-exchange markets.

The loonie extended its gains before the end of this week’s session as the national trade balance posted a diminished deficit for the previous month, indicating that exports can overtake imports in a mid-term future, as demand for Canadian commodities are on the rise while major economies rebound around the globe. The U.S. trade balance figures deteriorated beyond expectations, fact which also allowed the Canadian dollar to gain terrain further versus the greenback, even if the Bank of Canada still stresses on the fact that a strong currency can slow down the recovery process in Canada. Stocks rose globally, favoring even further the Canadian currency profile.

This week was rather volatile with risk appetite levels playing a major role for the Canadian currency. In Friday’s session several reasons provided support for the loonie to grow further, and it is very likely that if risk appetite continues strong among traders, the Canadian dollar will once again rally towards parity with its U.S. counterpart.

USD/CAD closed the week at 1.0512 from 1.0738 in the beginning of the week.

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