By TraderVox.com
Tradervox (Dublin) – Despite the dampening effect of the EU summit expectations, the Canadian currency managed to shoot for a while from two-week low after an advance by equities around the world advanced. The Canadian dollar started the week on a low on speculations the EU summit will not resolve the crisis in Europe which dampened demand for commodity related currencies. The demand for safe haven has continued to gain traction in the market but yesterday equity gain spurred some appetite for risk. Blake Jespersen of Bank of Montreal noted that the loonie is bound at half a cent range for this week.
Mark McCormick who is the Currency Strategist in New York at Brown Brother Harriman & Co noted that the Canadian dollar is being driven by the market sentiments as well as the developments in the euro area, hence the pending Merkel and Hollande meeting will have an impact on the currency today and the EU meeting that starts tomorrow will continue to affect the currency. He also added that the Canadian and US data are also central to the performance of this currency in the market. With the current situation in Europe and the uncertainties in the US economy, it is expected that the Bank of Canada will hold any move to hike interest rate.
The crude oil has become central in determining the Canadian dollar performance and the current fluctuations in the prices have resulted to the fluctuations in the performance in the Canadian dollar. The Canadian dollar has dropped 0.4 percent in May as a result while the euro has dropped by 1.1 percent. The greenback has increased by 0.9 percent. The Canadian dollar increased by 0.5 percent against the US dollar to trade at C$1.0238 at the close of trading yesterday in Toronto. It had fallen to C$1.0318 the previous day.
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