Earlier, the Canadian dollar was slightly lower, dropping on concerns about the eurozone economy and worries about the US fiscal cliff. The latest jobs report out of the United States, though, is changing that situation, and risk appetite is creeping back into the markets.
Statistics Canada reported that the Canadian economy added 59,000 jobs in November, and the jobless rate fell slightly. This happened at the same time that the US economy added 146,000 jobs, and saw its jobless rate drop. The good news is helping support the Canadian dollar as risk appetite makes a cautious appearance.
Loonie is also being supported as the currency continues to find favor with those who admire Canada’s resilient economy. Canada’s status as a commodity currency tied to oil is also helping as an improvement in commodity prices helps support the loonie. For now, there are reasons to turn to the Canadian dollar.
While the loonie is still vulnerable if risk appetite fades on eurozone and US economy concerns in the future, even then there will be support for the Canadian dollar. There’s a reason the IMF thinks that it should be considered a reserve currency.
At 14:42 GMT USD/CAD is down to 0.9883 from the open at 0.9914. GBP/CAD is down to 1.5825 from the open at 1.5911. EUR/CAD is down to 1.2748 from the open at 1.2852.
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