Early, the Canadian dollar moved higher in Forex trading, helped by higher oil prices. However, now the loonie is moving lower as traders await the results of the vote in Italy. While the vote is more of a budget issue, it is also being seen as a measure of confidence in PM Silvio Berlusconi.
Right now, a little bit of risk aversion has been introduced to the markets. The US dollar is still a little lower against the euro and the pound, but the greenback is gaining against the loonie. The Canadian dollar is heading lower along with other commodity currencies.
Normally, the loonie gets a boost from higher commodities prices (gold and oil are higher), as well as help from equities. However, there is a hint of caution today amongst Forex traders, and that has the Canadian dollar pulling back from its earlier gains. For now, there appears to be a measure of caution on the Forex market, and it will be interesting to see what happens when the Italy vote is over — and the disposition of Berlusconi is better known.
At 14:50 GMT USD/CAD is higher at 1.0139, up from the open at 1.3778. GBP/CAD is also higher, moving up to 1.6316 from the open at 1.6259. EUR/CAD is also higher, heading up to 1.4015 from the open at 1.3938.
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