The loonie broke below support at 1.024 and trades at 1.021 USD, a level we haven't seen since March 24th. The loonie has nearly a 90% correlation with commodity prices, and as oil continues to fall the loonie is dragged down with it. But lower oil isn't the only factor putting downward pressure on the CAD, there are two other items worthy of discussion. Firstly, the recent Europe debt crisis has caused a flight to quality where investors pour out of emerging markets (ie.Canada) and into perceived safe havens like dollars, francs, and gold. Also, speculators are dropping the CAD as a result of an expected rate hike that won't at the next BoC meeting. Tough to call a bottom, there is enough evidence to support a loonie above parity.
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