CAD Continues Upward After Strong Job Report Last Week

The Canadian dollar rose slightly against the greenback on Monday, building modestly on gains made late last week, as investors paused to assess the recent drastic moves in the price of oil and the U.S. dollar.

The loonie, as Canada’s currency is colloquially known, has dropped steeply since late October in line with a fall in the price of crude oil, a major Canadian export.

In that same period, the U.S. dollar has climbed versus most major currencies as more hawkish-looking U.S. central bankers have expressed increasing confidence in the U.S. economic recovery.

“We could be entering a period of rest here where several currencies and several asset classes have made really large moves and now it’s time to catch your breath and rethink where things should be valued,” said Camilla Sutton, chief currency strategist at Scotiabank.

“But certainly that fall in oil prices is a material shift for the Canadian dollar,” she said.

The price of a barrel of oil has steadily fallen since mid-2014 due to excess supply and subdued demand. It rose on Monday, which Sutton said likely supported the loonie.

The Canadian dollar CAD=D4 was last seen trading at C$1.1309 to the greenback, or 88.43 U.S. cents, stronger than Friday’s close of C$1.1333, or 88.24 U.S. cents.

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