Forex News

Canadian dollar declined to its 3-month lowest value against U.S. dollar this week continuing the correction, which began on November 7. USD/CAD gained about 1.3 percent this week going up from 1.0040 to 1.0170 making it sixth bullish week in a row — first such bullish sequence since February-March of this year.

CAD started to lose against its southern neighbor after Canadian Prime Minister and Minister of Finance both stated that too strong or overvalued national currency is not in the interest of the Canadian economy. Commodity exporting companies were greatly hurt by the fast USD/CAD decline which has been seen in September-October 2007.

Dollar started to regain its positions against all major world world currencies based on the very optimistic economical data on the GDP growth and consumer market indicators even among the financial crisis, which has almost destroyed the carry trade on Forex and drove money away from the high-yielding assets.

Long-term projections of USD/CAD trend can be based on both fundamental reasons for CAD to return to some ‘fair’ level of 1.05–1.10 per U.S. dollar and on the technical analysis, which still implies that recent correction is within the weekly bearish trend.

Earlier News About the Canadian Dollar:

• Bank of Canada Cuts Overnight Rate (2007-12-04)
• Canadian Continues to Fall (2007-11-27)
• Canada Confirms Dollar Too Overvalued (2007-11-26)
• Canada's Finance Minister Satisfied with Lower CAD (2007-11-23)
• Canadian Dollar Dips On Bada Statistics (2007-11-22)

This entry was posted on Saturday, December 15th, 2007 at 11:29 am and is filed under Canadian Dollar. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.