Canadian dollar is gaining today, drawing strength from rising commodities. Canada is especially seeing some support from rising oil prices. With oil supply in question, prices are up and the loonie is following suit.
Additionally, commodity currencies and other riskier currencies are in demand, despite the downgrade of nine eurozone countries — including France — after the markets closed on Friday. The big downgrades by S&P weren’t much of a surprise, and, besides, Moody’s hasn’t downgraded France.
For now, Forex traders are interested in higher yielding assets, and that means that the US dollar is heading lower. Indeed, greenback is dropping as commodities, which often move inversely to the dollar, head higher. This is proving helpful to the Canadian dollar, which has been hovering around parity with the greenback for quite some time now.
Loonie is likely to continue to derive some support from higher oil prices right now. The situation with Iran over the Strait of Hormuz could deteriorate further quite quickly, and, while there isn’t a lot of worry about supply disruption from the Nigerian strikes, that could change as well.
Some recent disappointing economic news out of Canada might be limiting the loonie, but for now it looks stronger.
At 16:50 GMT USD/CAD is lower at 1.0173, down from the open at 1.0247. GBP/CAD is lower, down to 1.5602 from the open at 1.5659
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