CAD Gains vs. USD as Investors Seek Higher Yield

The Canadian dollar advanced against its US counterpart as market sentiment improved, making investors more willing to risk and look for higher-yielding currencies. The currency was down against the euro and the yen.

The Producer Price Index in the US, the major trading partner of Canada, rose 0.2 percent in July, following the drop by 0.4 percent in June. Market analysts expected no change. Futures on crude oil (the key Canadian export) gained 1.9 percent to $88.32 per barrel. The Standard & Poor’s 500 Index climbed 1 percent.

The loonie (as Canada’s currency is often nicknamed) was down 2.4 percent this month on the mounting sings of problems in the global economy. The important report about the inflation in Canada will be released on August 19. Perhaps even more impact on the Canadian currency will have a testament by Bank of Canada Governor Mark Carney later that day.

USD/CAD fell from 0.9823 to 0.9809 as of 17:34 GMT today. EUR/CAD was a little higher at 1.4162 compared to the opening price of 1.4148, following the slump to 1.4083 earlier this day. CAD/JPY was down from 78.12 to 77.92.

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