Loonie Touches 3 month High on USD Weakness versus EUR

The Canadian dollar climbed to a three-and-a-half-month-high against the U.S. dollar on Tuesday, tracking global equities, commodities and other commodity-driven currencies higher as a stream of encouraging headlines lifted sentiment.

The Australian and New Zealand dollars got a boost after the Reserve Bank of Australia sounded content with policy where it was, while talk of stimulus measures in regional China underpinned risk appetite.

Meanwhile, talk the European Central Bank will take strong action to ease Spanish and Italian borrowing costs was also being telegraphed to markets.

Wednesday’s Canadian retail sales data, comments from Bank of Canada’s Mark Carney when he speaks to the Canadian Auto Workers union and the U.S. Federal Reserve’s FOMC minutes could all be factors in the currency’s direction. Market watchers will look closely for any change in the Canadian central bank’s perceived tightening bias.

via Reuters

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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