Loonie rallies as markets embrace risk

October 12, 2011 1:31 PM43 commentsViews: 57

Loonie rallies as markets embrace risk

TORONTO – The Canadian dollar hit its highest level against the U.S. dollar in almost three weeks on Wednesday as risk appetite grew on hopes that a crisis in the euro zone would be avoided, lessening the chances of a global recession.

Slovakia, the only euro zone country to not yet approve an increase in the zone’s emergency fund, seen as critical to containing the region’s debt crisis, looked set to come to an agreement by Friday.

That helped the euro rise to a near one-month high against a weaker greenback and global stocks rallied as investors unwound safe-haven bids.

“A lot of money is coming out of the Treasury market sending yields sharply higher,” said Sal Guatieri, senior economist at BMO Capital Markets.

The Canadian dollar hit C$1.0135, or 98.67 U.S. cents, its highest level since September 22.

The currency weakened off by the end of the North American session, but still held on to gains of around a penny, finishing at C$1.0173 to the U.S. dollar, or 98.30 U.S. cents. That compared with Tuesday’s North American close of C$1.0279 to the U.S. dollar, or 97.29 U.S. cents.

Canada is a major exporter of commodities, which have been under pressure in recent months as fears over the state of the global economy put demand into question.

On Wednesday, other commodity-linked currencies, including the New Zealand and Australian dollars, also made large gains.

“It reflects optimism that the global economy may avoid a recession and therefore, there’s an improved outlook for commodities and that’s supporting commodity-based currencies,” Guatieri said.

U.S. crude prices actually ended slightly lower at $89.59 a barrel on profit-taking after rising 13 percent over the previous five sessions, while gold prices rose 0.8 percent to $1,678.80 an ounce in response to the weaker greenback.

Michael O’Neill, vice-president of FX Trading at RJOFX Canada, said he expects the Canadian dollar to trade in a range of C$0.9980 and C$1.0230 for the rest of the week.

David Watt, vice-president, senior fixed income and currency strategist at RBC Capital Markets, said he thought the risk rally may be slightly overdone.

“Even if we get the best-case scenario for some of the EU contagion risks being contained, there are still a number of cyclical risks to year-end,” he said, adding that the world trade outlook still called for a further slowdown. “Not a catastrophe, but a further slowdown.”

On the Canadian data front, new home prices edged up 0.1 percent in August for the second straight month, showing more moderate increases than in the second quarter, according to Statistics Canada.

Bond prices drifted lower across the board, tracking U.S. Treasuries, as fears about Europe’s debt crisis receded.

The two-year Canadian government bond shed 8 Canadian cents to yield 1.026 percent, while the 10-year bond dropped 50 Canadian cents to yield 2.356 percent.

Canada’s sale of five-year government bonds met with healthy appetite on Wednesday, despite the unwinding of risk aversion.

The C$3.5 billion ($3.4 billion) auction of bonds produced an average yield of 1.729 percent, down sharply from 2.309 percent at the last five-year bond auction in July, before global markets took a turn for the worse.

The Canadian bond auction, however, was overshadowed by a $21 billion auction of reopened 10-year U.S. Treasury notes, which had the weakest demand in nearly a year as investors turned to beaten down stocks and away from the lower-risk government debt.

“That just shows where the pressing concerns are,” Watt said. “The pressing concerns aren’t with the Canadian financial situation, the concerns are the U.S. Treasury market.”



  • I admire the beneficial data you offer in your articles or blog posts or blog site posts. Ill bookmark your blog page and have my kids check out up right here usually. Im quite convinced they will learn lots of new things here than anybody else! Black Ops nazi zombies

  • Hi, Neat post. There’s a problem with your website in internet explorer, would test this… IE still is the market leader and a huge portion of people will miss your fantastic writing because of this problem.

  • You actually make it seem so easy with your presentation but I find this matter to be actually something which I think I would never understand. It seems too complex and extremely broad for me. I am looking forward for your next post, I will try to get the hang of it!

  • truly wonderful article, thank you

  • I really desire I hadn’t witnessed this as I really want just one now!

  • I haven’t checked in here for a while since I thought it was getting boring, but the last few posts are great quality so I guess I’ll add you back to my daily bloglist. You deserve it my friend :)

  • merci beaucoup pour cette information, c’était dr?le …, I ont été à la recherche de ces informations !

  • Hands down, Apple’s app store wins by a mile. It’s a huge selection of all sorts of apps vs a rather sad selection of a handful for Zune. Microsoft has plans, especially in the realm of games, but I’m not sure I’d want to bet on the future if this aspect is important to you. The iPod is a much better choice in that case.

  • I think other website proprietors should take this site as an model, very clean and wonderful user friendly style and design, let alone the content. You’re an expert in this topic!

  • This particular is certainly probably the greatest powerful weblogs Ive go through in a very long time. The quality of particulars in here’s fantastic, such as you essentially authored the book on the topic. Your blog is great for everybody who would like to be familiar with this unique subject more. Awesome information; please keep it up!

  • Investments such as the one you suggested the following can be very whenever you are a ordeal! I will build a web page link from this page in my site. Almost certainly my website targeted visitors can get this extremely helpful.

  • Good info. Lucky me I reach on your website by accident, I bookmarked it.

  • I haven’t a clue how to use WordPress and Comicpress to create sites and publish comic strips! Please help. Do you know of a good walkthrough? Thanks much!.

  • I am often to blogging and i really appreciate your content. The article has really peaks my interest. I am going to bookmark your site and keep checking for new information.

  • Greetings! Very helpful advice on this article! It is the little changes that make the biggest changes. Thanks a lot for sharing!

  • What is the difference between Computer Engineering and Computer Science?

  • I am not sure where you are getting your info, but good topic. I needs to spend some time learning more or understanding more. Thanks for magnificent information I was looking for this information for my mission.

  • Great beat ! I would like to apprentice while you amend your site, how can I subscribe for a blog site? The account helped me a acceptable deal. I had been tiny bit acquainted of this your broadcast offered bright clear concept

  • After reading your blog post I browsed your website a bit and noticed you aren’t ranking nearly as well in Google as you could be. I possess a handful of blogs myself and I think you should take a look here: http://dominateseowithwordpress.com You’ll find it’s a very nice tool that can bring you a lot more visitors. Keep up the quality posts

  • Attention webmasters. As a fellow wordpress blog owner, I just wanted to let you know about a new free “webmaster’s toolbar.” It is a must have for any serious webmaster. It is fully customizable with thousands of apps, and is preloaded with apps like a Whois searcher, TinyURL app, Javascript extractor, Fake name generator, browser speed tester, and more. You can find it here: http://www.toolbar-shop.com/webmasters-toolbar What are you waiting for? It’s free! Plus if you download it and install it, they will create a custom toolbar for your site for free.

  • Is there a way you can have your own blog site instead of contributing to one already made.. I have no idea how a blog works? How do you pay for it? How do you start one? Please help! It would be much appreciated! Thank you!.

  • i couldnt reach ou by e-mail please follow this link to assure your weekly affiliate commission http://9oul.com/cash

  • If you’re serious about making money with your website, watch this free video about getting free instant targeted traffic to your site http://instanttrafficrobot2.com

  • Hello there, I discovered your site by the use of Google at the same time as looking for a similar subject, your website got here up, it appears great. I have bookmarked it in my google bookmarks.

  • Nice site , i have bookmarked it for later use, thanks.

  • I am not sure where you’re getting your info, but great topic. I needs to spend some time learning much more or understanding more. Thanks for great information I was looking for this information for my mission.

  • I think this is among the most significant information for me. And i’m glad reading your article. But wanna remark on some general things, The site style is wonderful, the articles is really nice : D. Good job, cheers

  • What did you use to design your blog? It’s really awesome can you send me an email and let me know?

  • Definitely believe that which you stated. Your favorite justification seemed to be on the web the easiest thing to be aware of. I say to you, I definitely get annoyed while people consider worries that they plainly don’t know about. You managed to hit the nail upon the top as well as defined out the whole thing without having side-effects , people could take a signal. Will likely be back to get more. Thanks

  • Magnificent goods from you, man. I’ve understand your stuff previous to and you’re just extremely wonderful. I really like what you’ve acquired here, certainly like what you’re saying and the way in which you say it. You make it enjoyable and you still care for to keep it smart. I cant wait to read much more from you. This is actually a tremendous website.

  • Hey There. I found your blog using msn. This is a really well written article. I will make sure to bookmark it and return to read more of your useful info. Thanks for the post. I’ll certainly comeback.

  • I think this is one of the most important info for me. And i’m glad reading your article. But wanna remark on few general things, The site style is ideal, the articles is really great : D. Good job, cheers

  • Thank you. Fine issues.I have added to your favorites

  • I have been surfing online more than 3 hours today, yet I never found any interesting article like yours. It is pretty worth enough for me. Personally, if all site owners and bloggers made good content as you did, the web will be a lot more useful than ever before.

  • Speaking of number, any rarity involving Yugioh invites are classified inside of eight types. That also includes occasional, tremendously exceptional, super, epitome of, approach, similar, deck exodia 2010 with the best mazzi yu gi oh adult, ghost sought after. Under the class, they are produced by strategia yu gi oh with gi oh silver antique foil. One of them is present holdings and liabilities bundle, apart from the main OCG kits. The Really Hard to find, though, will written for holographic foil details, even though the Seriously Some comes equipped with rare metal foil. Others are actually printed one or the other found on bullion potentially holographic components aluminum foil. On this website there is the major guide about yugioh yu gi oh carte dan carte proibite

  • I am not sure where you’re getting your information, but good topic. I needs to spend some time learning more or understanding more. Thanks for great info I was looking for this info for my mission.

  • I think this is among the most vital information for me. And i’m glad reading your article. But wanna remark on few general things, The website style is perfect, the articles is really excellent : D. Good job, cheers

  • Hey there, You have done a fantastic job. I’ll definitely digg it and personally recommend to my friends. I’m sure they will be benefited from this site.

  • Excellent post. I was checking continuously this blog and I’m impressed! Extremely useful information specifically the last part :) I care for such information much. I was seeking this certain info for a long time. Thank you and good luck.

  • I’m having a hard time viewing this information from my iPhone. Maybe you could upgrade the site and make it more accessible from my phone. Thatd be real cool!

  • I was recommended this website by my cousin. I’m not sure whether this post is written by him as nobody else know such detailed about my difficulty. You’re incredible! Thanks!

  • Aaron, some thing is screwed up along with your WordPress install. Blog Comments is trying to read your WordPress feed, which at the moment may be very broken. Just take a search for on your own

Leave a Reply

amazing online casino games