The Canadian dollar has been really pushing up fast last week. It is already up to 90.5 cents US already today. That’s a pretty fast move considering just the other week it was at 85 cents US.
Personally, I’m not really sure how long this optimism will last. It just seems so stupid. Like stocks and currencies are moving on beating expectations, but if you put expectations low enough you’re bound to beat them. It doesn’t mean things are necessarily improving. The fact of the matter is the root cause is still in play. Banks still have toxic assets on their books. Foreclosures are actually growing and housing prices are still falling.
July 18 (Bloomberg) — Canada’s currency registered its first five-day increase since May, ending a six-week losing streak, as investors raised bets on higher-yielding assets on speculation the global recession is easing.
The Canadian dollar, which was the worst performer last month among the world’s most-traded currencies, strengthened 4.5 percent as crude oil and other commodities that historically benefit from economic recovery advanced. Raw materials account for more than half of Canada’s export revenue.
“You must remember what happened in June,” said Krishen Rangasamy, an economist in Toronto at CIBC World Markets Inc., a unit of Canada’s fifth-largest bank. “This is a recovery from those low levels. We’ve seen in improvement in optimism.”
Canada’s currency, known as the loonie for the aquatic bird on the one-dollar coin, appreciated to C$1.1134 per U.S. dollar in Toronto, from C$1.1638 on July 10. Its last weekly gain, a 2.6 percent increase, was posted May 29. One Canadian dollar buys 89.81 U.S. cents.
The loonie remained below an eight-month high it touched on June 1, C$1.0785, after gaining the most in May since 1950.
