The loonie posted gains for 5 weeks in a row, on speculations that the global financial turmoil is easing, pushing commodity prices up.
Canada’s currency has been a fantastic investment since the beginning of March, against its U.S. counterpart, having the biggest rally since November 2007 gaining more than 2 percent during the past week. This month has been an optimistic one if compared with the previous ones marked by extremely downturns in trading markets, and the Canadian dollar, being a high-yielding currency driven by risk appetite and commodity prices, had the opportunity to post solid gains after several months of significant losses.
Being one of the most correlated currencies with the equity markets, analysts expect that as long as stocks continue to recover from last year’s losses, the Canadian dollar is expected to strengthen, also pushed by commodity prices. Even if the current moment is extremely positive for the loonie, uncertainty still remains among economists, which avoid to confirm that the Canadian dollar is a good bet for the long term, claiming that days of growing risk appetite may move or not the global markets for the next weeks.
The USD/CAD closed this week at 1.1856 from 1.1930 in the intraday comparison. The CAD/JPY rose from 82.50 to 83.56.
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