AFP: Oil prices send loonie rising in overseas trading
The Canadian dollar continued to soar in overseas trading Thursday on the back of rising oil prices, gaining two cents after Wednesday's three-and-a half cent gain.
At 7:25 a.m. Eastern time, the loonie was trading at 83.60 U.S., nearly two cents higher than Wednesday's close of 81.63 cents U.S.
In early trading Thursday, the dollar was as high as 83.86.
"Part of the reason is that oil was up $4.77 yesterday, gold was up $13.50, and the Canadian dollar is of course tied into those resources," BNN's Michael Kane said Thursday on Canada AM.
The falling U.S. greenback is also making the loonie appear stronger, Kane said.
The U.S. Federal Reserve cut its key interest rate Wednesday by another half a percentage point and rate cuts have "a tendency to weaken the dollar," Kane said.
Investors may also be skittish about the greenback ahead of a second-quarter report on the U.S. gross domestic product that is to be released today.
The GDP is a primary indicator of economic growth or contraction, Kane said, and experts are divided on what the report will say.
Estimates range from growth of 1.2 per cent to contraction of 1.9 per cent, Kane said.
The loonie's jump Wednesday was its largest single-day gain, beating a record set in the early 1970s.
With files from The Canadian Press
Please Add Comments(10)
pp
It is enough to make a person sea sick
Goes up
Goes down
Goes up
Goes down
Where is my gravol...
Frunk
This is great for us "snowbirds". I would like to see it level off at about .85 cents for the sake of exports.
Chris Ont
It's not over yet but this was forcasted to happen once the turmoil settled. These are some of the buying opportunities talked about.
the rich will get richers oon
This is obviously the markets' flavour of the week... Up until last week, the loonie was crashing and the greenback was soaring. new week, new scenario: greenback crashing, loonie soaring... Next week, change partners: the yuan soars while the yen crashes. Interest rates go down, market confidence crashes, etc.
When will this end?
STABILITY NEEDS TO RETURN AND THOSE MORTGAGE BROKERS IN THE US WHO STARTED THIS SPECULATION AND GREED THAT RESULTED IN GLOBAL RECESSION NEED TO BE TRIED AND JAILED!
TG
I imagine now that the price of oil has gone up, we will see the price of gas immediately follow. Which of course would be the total opposite to what happens when the price of oil goes down. Go figure.
Mark M
Dollar is flying again...interests rates are low and stocks are rock bottom for easy pickings..not everything is that bad I guess, just depends on how you see it, or on how much you extended yourself beyond your means when things were good!
jp
So i quess gas prices wont drop. they will come up with another excuse!!!! The only problem is we are so cullible!!!
Jimmy B - Perth Ont.
It really surprises me that the loonie has fallen as low as it has and so quickly. It is no secret that Canada is laden with oil and that we are in a stronger financial position than many industrialized nations. Due to our overall adaptability to change and our diverse cultural heritage we are a very vibrant and productive nation. As far as I see it and at the risk of bragging, Canada should be a save bet for any investor abroad. Go Loonie Go!
DON
I THINK THE DOLLAR IS WORTH THEN THE US DOLLAR.AND IT COMES IN DIFFERENT COLOURS ALSO.
jtk
Right. When oil goes down and the $CA is low, then gas prices stay high.
When the $CA goes up and oil stays the same, then gas prices stay high.
When the $CA goes up and oil goes up, then gas prices go up.
