Loonie Tries to Make Up Lost Ground

Canadian dollar tumbled yesterday, falling all the way below the 90 cent level against the US dollar, due to expectations for the global economy and to policy divergence with the greenback. Today, the loonie is trying to eke out gains against its major counterparts.

Loonie is expected to see some degree of weakness against the US dollar and other major counterparts in coming weeks. Thanks to the fact that global stock markets are struggling a bit, and thanks to uncertainty over the economy, the Canadian dollar is likely to weaken.

Yesterday, the loonie took a hit, especially against the greenback, as the US dollar rallied on expectations for policy divergence. The news also sent global stocks down, and this negatively impacted the Canadian dollar.

No one is quite sure what the Bank of Canada will do next, but there are still questions about the stability of Canada’s economy, and concerns about what’s next for the housing market. So, for now, many expect that the loonie will remain relatively weak, even as it attempts to make up some of its lost ground.

At 10:20 GMT USD/CAD is down to 1.1105 from the open at 1.1110. EUR/CAD is down to 1.4154 from the open at 1.4167. GBP/CAD is down to 1.8125 from the open at 1.8132.

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