Rise in commodity prices seems to be favoring Canadian dollar. Today Canadian dollar is in escalating phase. Supply of oil has gone under a shadow. This resulted in rising of all prices, including commodities.
In addition to this, the demand for all risky currencies as well as commodity currencies is in high. This trend continued till close of markets on Friday. This trend continued despite the ongoing debit crisis and credit degradations of nine European countries.
Downgrading of several eurozone countries by S&P did not come as a surprise to any. France credit grading remained same as Moody’s has not downgraded it. As of now, all Forex traders are showing interest in yield of assets in a big way. This has come heavily on US dollar by lowering it with a head start.
Greenback is supposed to be moving right opposite to US dollar trend. Whereas this time, green back is also dropping as commodities are heading high. This is, on the other side, helping rise of Canadian dollar. This is a new start as Canadian dollar has been, quite for some time now, fluctuating along with greenback.
It is expected that higher oil prices that are prevailing now should continue its support to Loonie. The situation prevailing over Strait of Hormuz, with the stand of Iran, is likely to decorate further and quickly. However, disruption of oil supplies from Nigerian strike is not threatened. Loonie was disappointed by the recent news on the economic condition of Canada. However, it looks stronger now.