The Canadian currency rebounded in the end of 2009 despite the nation’s central bank statements that a strong currency can be an obstacle for exporters and consequently to the economic recover, as global demand for commodities rose more than speculations regarding Canada’s central bank position towards loonie.
The Canadian dollar ended last year posting the highest yearly rise versus its U.S. Counterpart since 2007 as the economic recovery in the country and globally provided support for traders to inject capital in the country once again after the worst economic crisis since the currency started to fluctuate freely, 40 years ago. After home prices rebounded and unemployment fell from the worst level in more than a decade, the Canadian currency managed to gain considerably in the past month specially versus a less attractive euro, and once again moving towards parity versus its U.S. counterpart.
The rising demand for commodities worldwide and specially in a recovering U.S. may once again raise concerns in the Bank of Canada regarding the loonie’s rates, which could lead to monetary policies to control the nation’s currency advance, but, if these measures will not be confirmed, it is likely that the loonie will remain bullish in early 2010.
USD/CAD started 2010 at 1.0454. CAD/JPY started the year at 87.88.
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