The Canadian dollar continued to grow today after rising from the one month bottom in which it has been until yesterday. Oil rose to the record high levels above $100 per barrel recently adding interest to one of the largest oil-exporting economies.
Canadian dollar rose this week again, after its sharp turn back from the long-term growth to the depreciation against the U.S. dollar.
The Canadian dollar showed an unprecedented growth against the U.S. dollar last year. Rallying almost straight from 1.1635 to 0.9905, USD/CAD lost almost 15% in one year and broke two important support levels - psychological barrier of 1 CAD per USD and reaching its lowest value since the floating of the USD/CAD rate - 0.9057.
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.
Bank of Canada lowered overnight interest rate by 0.25% to 4.25% today during its scheduled meeting; this interest rate will be used until at least the next such meeting which will be held on January 22, 2008.
Canadian dollar depreciated to its monthly lows today after global commodities prices went down. The OPEC warned that they might increase the oil output to counter the possible economical slowdown on oil-importing countries. That message caused a decline in oil prices.
Canadian Prime Minister, Stephen Harper, confirmed yesterday that his vision of latest CAD’s fast and strong appreciation against USD coincides with the opinion stated by Canada’s Financial Minister Jim Flaherty. The surprisingly high strengthening of Canadian currency bears highly speculative nature and is essentially harmful to the Canada’s economy.
Jim Flaherty, Canadian Minister of Finance, said today that he is glad to see Canadian dollar losing against U.S. dollar on Forex, after there were almost three month of unstoppable appreciation of the Canada’s currency. As the rallying Canadian dollar’s appreciation hurts exporters, Canada’s economy could be at the risk, giving government another concern to worry about.
Yesterday Canadian dollar reached its monthly minimum levels after the macroeconomic statistics were released by Canada’s National Statistics Agency. September 2007 retails sales fell by 0.2 percents compared to previous month. USD/CAD traded at 0.9923 on Forex as the data was released.