The Canadian dollar is getting help today from the fact that oil prices are on the rise. Concerns about oil have been weighing on the loonie, and while there is still some weakness likely ahead, for now the Canadian dollar has the upper hand.
Oil prices are heading higher, even though there remains a glut of supply in the markets. Part of the increase has been somewhat expected since it’s refinery season in the United States, leading to an expected build. However, some factors are head-scratchers. With Iran’s sanctions lifted, more oil from the Middle East should be forthcoming. Additionally, Russia has been increasing output as well.
With these factors, it seems a little strange that oil prices are on the rise. However, the problems behind oil’s rise aren’t stopping the Canadian dollar from seeing its first solid gains in quite some time.
Some analysts expect the gains to be short-lived, though. More loonie weakness is expected in coming months, as oil prices drop again, and as the Canadian economy slows.
At 14:51 GMT USD/CAD is lower, dropping to 1.3660 from the open at 1.3771. EUR/CAD is also lower, heading down to 1.5292 from the open at 1.5299. GBP/CAD is dropping down to 1.9948 from the open at 2.0107.
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