The Canadian dollar profited from a higher risk appetite session today and rebounded versus the yen and its U.S. counterpart as equities rose in North America, allowing the correlated loonie to profit from this trading scenario.
After two days losing in currency markets as concerns that the Canadian economic recovery is not as robust as analysts suggested, the loonie rebounded today, profiting from a positive performance of stocks and commodities, which have an extreme influence in the Canadian currency rates as raw materials exports are responsible for a big cut on the country’s international trade. The Canadian dollar also benefited from a less attractive U.S. dollar, which has been losing its appeal as the nation published several reports which featured data below forecasts, suggesting that interest rates will be not hiked so soon in the world’s wealthiest nation.
Demand for commodities is still playing a major role to back the loonie’s advance, as Canada’s economy, and consequently its currency, will rely on the global economic recovery in the first half of 2010 to determine whether demand for the nation’s raw materials will allow the country to recover steadily or not.
USD/CAD traded at 1.0304 as of 19:42 GMT from a previous rate of 1.0385 in the intraday. CAD/JPY rose to 88.60 from 87.52.
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