Canadian Dollar Falters as Global Economic Concerns Grow
The Canadian dollar is struggling against the US dollar in Forex trading today. Indeed, the loonie is one of several currencies dropping against the dollar as Forex traders look for safe haven in these difficult and disappointing times. With Chinese growth slowing, and the European sovereign debt crisis still in full effect, Forex traders are starting to get nervous about what’s next.
This nervousness is leading to gains for the US dollar, which continues to climb against the Canadian dollar. Even though the latest economic data shows that Canada’s economy grew in July, there are still very real concerns about how a general economic slowdown, led by China and the US, could affect the Canadian dollar. Loonie is down by levels not seen in nearly a year against the greenback.
At 13:07 GMT, USD/CAD is at 1.0441, up from the open at 1.0362. The Canadian dollar is also down against the UK pound, with GBP/CAD at 1.6272, up from the open at 1.6195. It is worth noting that US dollar is up against most major currencies today, on safe haven demand, with EUR/USD lower at 1.3467, down from the open at 1.3598.
If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.
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Canada, Dollar, EUR/USD, Euro, GBP/CAD, Great Britain, Loonie, Pound, United States, USD/CAD
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Earlier News About the Canadian Dollar:
- CAD Slows Decline, Posts Record Weekly Drop vs. USD (2011-09-23)
- CAD Falls Below Parity with USD After Fed Statement (2011-09-22)
- IMF Lowers Growth Forecast for Canada (2011-09-21)
- European Problems Have Negative Impact on Canada's Currency (2011-09-20)
- Canadian Securities Drive Canadian Dollar to Two-Week Record (2011-09-17)
3 Comments
I need to understand!! WHY does a struggling economy like Europe or Japan have such strong currencies BUT Canada with ALL of its incredible resources and stability have a 3rd world currency????
Even the other day I was listening to a french economist say that a strong euro is vital to them.
PLEASE I do not want to hear that it is bad for imports… Japan is dependent on them and they keep their Yen strong….
And why are we SO linked to the US dollar
Thanks for your questions! I will try to answer them separately:
1. European and Japanese economies aren’t struggling. There are weak economies in the eurozone, but that doesn’t mean that the whole European economy is laid back or something. Japanese economy is very strong, although it’s growth has stalled.
Canada’s currency is by no means a “3rd world” one. Why would you say that?
2. I don’t know why would a French economist say such thing, unless he’s engaged in importing sector.
3. Strong currency is actually good for imports, it’s bad for exports. If you doubt that, you can read latest SNB report on how the fast appreciation of the Swiss franc affected the national economy:
http://www.snb.ch/en/mmr/reference/quartbul_2011_3_komplett/source/quartbul_2011_3_komplett.en.pdf (skip to Exchange Rates Survey part).
Japan doesn’t want to keep their yen strong, it’s the foreign investors who buy yen, and make it strong. Both the Finance Minister and the head of their central bank would love to see yen decline.
4. The answer is very simple – the share of total exports + imports of the United States in Canada’s trade balance is 68%:
http://www.statcan.gc.ca/pub/11-402-x/2010000/chap/international/international-eng.htm
Dear Andrei,
Thanks for your reply!
Sorry for the miss writing… I did mean exports as the export faction seems also mighty here in Canada…
I will try to find the news byte for that french economist (a woman btw), but even the Japanese on NHK the other day said that they would help the export sector NOT by downgrading the yen but by subsidies…
As for the 3rd W reference, for example, went to Tunisia and I must say our $ is MUCH closer to the Tunisian Dinar than the Euro… I remember a few yeard back when our $ was almost at par with DTN…
Again this amazes me as Canada is a prosper, SUPER resource filled country and our currency shakier than countries that are going through revolutions, and weak with depts!!
Again thanks for your time