Canadian Dollar Reaches Strongest Since May After Draghi Remarks

Canada’s dollar climbed to the strongest since May versus its U.S. counterpart after European Central Bank President Mario Draghi’s comments about preserving the 17-nation currency sparked a rally in higher-risk assets.
The Canadian currency was headed for a 0.4 percent increase against the greenback this week amid gains in stocks and crude oil, the nation’s largest export. Draghi said policy makers will do whatever is needed to preserve the euro.
“The Canadian dollar is reacting to Draghi’s very strong comments,” Camilla Sutton, head of currency strategy at Bank of Nova Scotia in Toronto, said in a telephone interview. “There’s a significant short covering in euro. Other markets are following suit on reduced risk aversion.” Short covering refers to buying a security to square earlier bets that it would fall.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza