Canadian dollar is heading higher against the US dollar today, gaining as oil prices rise, and as risk appetite returns to the Forex market. Loonie is gaining, in a reversal of Friday’s losses, and appears ready to enforce a degree of strength this week.
As a commodity currency tied to oil, one of the helps the Canadian dollar is receiving in Forex trading today is higher oil prices. The European Union embargo of oil from Iran is helping the price of oil, as is speculation about what’s next in Nigeria. On top of that, some expect that global demand for oil will increase as signs of economic recovery in the United States continue.
Loonie is also benefitting from a general tendency toward risk appetite today. European leaders insist that progress is being made in talks about Greek debt, and that is providing a catalyst for risk. US dollar is lower in general, and high beta currencies like the Canadian dollar are on the rise.
However, it is important to understand that the situation could change quickly. A breakdown in Greek debt talks, more less than encouraging economic news in Canada, or a drop in oil prices could all bring the loonie lower.
At 15:35 GMT USD/CAD is lower at 1.0066, down from the open at 1.0144. GBP/CAD is also lower, down to 1.5688 from the open at 1.5782. CAD/JPY is a little bit higher at 76.49, up from the open at 75.84.
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