The Canadian dollar strengthened today, rising for the first time this week against the U.S. currency and for the first time in four days versus the euro, as the crude oil gained and the U.S. economic growth were slower than expected, increasing the demand for the safe haven.
The Canadian currency went up as the equities gained and the crude oil futures rose by 2.8 percent. The U.S. economy grew by 2.7 percent in the first quarter of this year, less then forecasted, arousing doubts about the credibility of the U.S. currency. The investors require safety as the European economy is faltering, and the slow growth in Japan and the U.S. damp the appeal of these currencies as the safe haven. The Canadian dollar may take place of the safe currency under these circumstances as Canada shows the strong balance sheets.
The central banks across the world may consider using the loonie in the role the reserve currency, as many traders think that Canada doesn’t have the problems many other countries have. Such opinion isn’t surprising, considering that Canada was the last of G-7 members to enter the global recession and the first to emerge from it.
USD/CAD fell to about 1.0368 as of 19:24 GMT today from the opening price of 1.0427. EUR/CAD traded near 1.2832 after it opened at 1.2861.
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