Speculations that demand for commodities will continue to grow in the U.S. and globally are helping the Canadian dollar to benefit from this scenario as exportation of raw materials account for half of the country’s trading revenue.
The Canadian rose against almost all of the 16 main traded currencies as metallic and energetic commodities abundant in the country are experiencing a high demand as the global economic recovery spurs demand for raw materials. Canadian fundamentals are also stronger than most of its main trading partners, and the loonie rose versus the greenback today as U.S. retail sales declined, touching the highest level in three months versus its U.S. counterpart. The loonie also gained considerably versus the euro as several Eurozone member countries are struggling with deteriorating budget deficits.
Not only the demand for commodities but also the Canadian economy seems to perform better than the several wealthy nations as the U.S. and the U.K., this is bringing investors to the country, according to analysts. If the Bank of Canada doesn’t express concern, it is likely that the loonie will reach parity with the greenback at some point this year.
USD/CAD traded at 1.0252 as of 18:17 GMT from a previous rate of 1.0308 yesterday.
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