Canadian Dollar Drops Sharply on Oil Rates
The Canadian dollar had one of the worse weekly performances in months as a decline in crude oil prices towards the end of this week affected negatively the loonie’s outlook, considering the energetic commodity as one of the main exports of the North American nation.
Several reasons changed a rather bullish tone regarding the Canadian currency as a U.S. dollar with improved attractiveness and a downturn in commodities markets shifted the winning trend of the Canadian currency which touched a one-year high this September. After concerns raised in the Bank of Canada regarding a strong currency that could delay the economic recovery in the country, interventions were not necessary to make the loonie to fall versus most of the 16 main traded currencies, as Canadian main exports are raw materials, and a drop in commodities prices forced the loonie more than 2 percent down this week.
Analysts opinion suggest that a constellation of factors was formed this week shifting a positive outlook for the Canadian currency to a downtrend in matter of hours. A faltering oil is certainly one of the biggest driver inducing the outlook for the loonie to a negative sentiment, but as long as risk appetite reappears, the loonie will have space to climb again.
USD/CAD closed the week at 1.0913 from a rather neutral price from Thursday, but a much higher rate than as of Monday, when it was traded at 1.0725.
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Earlier News About the Canadian Dollar:
- Faltering Oil Affects Canadian Dollar Performance (2009-09-25)
- Canadian Dollar Declines on National Bank Statement (2009-09-23)
- Canadian Dollar Declines Further on Commodities (2009-09-22)
- Canadian Dollar Drops From Record High on Stocks (2009-09-18)
- Canadian Dollar Raise National Bank Concerns (2009-09-17)