Loonie Drops For First Time against the Greenback in Over a Week

Submitted by Tradervox 1 on Wed, 15/08/2012 - 08:52
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Tradervox.com (Dublin) – The Canadian dollar dropped against the greenback today as commodities dropped including crude oil which is the largest export to United States. The loonie had increased for the last six days, registering the longest ascent since October 2010. The risk appetite in the market had pushed the Canadian dollar to three-month high against the US counterpart. The decline came as Stocks fell halting the longest advance since 2010. According to Shaun Osborne, the Chief Currency Strategist in Toronto at Toronto Dominion-Bank, the equity market seems to take a halt which has resulted to the recent decline in Canadian dollar. He indicated that while there is no event that seems to have the potential to push the loonie back to upward trend, the descent will not be sustained for long.

The Crude Futures had increased by as much as 1.4 percent but dropped by 0.9 percent. The US stocks declined where the Standard & Poor’s 500 Index dropped by 0.1 percent. Blake Jespersen predicted that the loonie might increase to a high of 98 cents versus the US currency in the coming month. Jespersen is the managing director of foreign exchange at Bank of Montreal in Toronto. Shaun Osborne had also expressed similar predictions, saying that the loonie might strengthen to 98 cents against the US dollar after forming a gravestone Doji chart in Aug 10. This chart is a candlestick formation which is formed by opening and closing prices when they are equal and occur at the low of the day. This is an indication of balance in demand and supply.

The Canadian dollar dropped by 0.2 percent against the dollar to trade at 99.26 cents per Dollar at the close of trading in Toronto yesterday. The pair had touched 99.05 cents per dollar earlier in the day.

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