Wednesday, 28 October 2009

Canadian dollar

The loonie is having a rocketing performance versus its U.S. counterpart even after a negative economic report in Canada indicated a higher-than-expected shrinking rate for the nation’s economy, reaffirming the high current risk appetite among traders.

The Canadian dollar reached a 10-month high versus the greenback last Friday as traders are heavily driven by risk appetite, betting in commodities and stocks, consequently affecting positively Canada’s currency, which is strongly linked to crude oil rates, since this commodity is one of the main Canadian exports to the United States and several other countries. A report last week also indicated that the Canadian gross domestic product shrank more than analysts’ expectations, but since the sentiment towards the U.S. dollar is so negative currently, and risk appetite is still on the rise, and the Canadian dollar was barely affected by the report indicating a worrying recession in the country.

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