Canadian Dollar to Tumble Further?

The Canadian dollar is ending this week’s session as the worst in more than two months as stocks and commodities, extremely influential to determine the rates and sentiment for the loonie dropped, setting the North American currency losing streak further down.

In a strong risk averse session where safe refuge currencies like the U.S. dollar and the Japanese yen were the best performers, the Canadian dollar weakened not only against those, but versus a number of other main traded currencies, due to its highly commodities and equities-linked profile, that was impacted today as the crude oil fell further following stocks around the world, that specially in Asia, did not manage to pare yesterday’s losses. The Canadian dollar has been moving away from parity versus its U.S. counterpart after the national central bank stressed that a strong currency could be an obstacle for the economic recovery, and now, stocks and commodities are also providing support for the greenback to advance versus the loonie.

Analysts relate directly this week’s stocks performance to the loonie’s decline, indicating that also the oil’s back down after touching $80 a barrel earlier this week was another negative factor that pushed the Canadian currency to its sharpest losing streak in months, which may continue as long as stocks remain bearish.

USD/CAD traded at 1.0719 as of 19:37 GMT from a previous rate of 1.0633 yesterday.

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