Loonie benefits from gains to crude oil

Posted On: June 26, 2012
Gains to crude oil helped drive the Canadian dollar higher in value against its southerly rival on Tuesday, according to Bloomberg.

Concern about the sovereign debt crisis has pulled down the loonie against the majority of its counterpart currencies this month. Pessimism is spreading about euro zone leaders' abilities to control the debt scourge when they convene for two days of meetings in Brussels on Thursday and Friday of this week.

"There's a very slightly improved risk tone today," managing director of foreign exchange institutional sales Blake Jespersen with Bank of Montreal in Toronto told Bloomberg. "The Canadian dollar does seem to find a fair amount of support at the 1.03 level. It's now starting to run into resistance at 1.0250."

The value of the loonie on Monday was at its lowest since June 12. Government bonds dropped, which drove up the yield on the nation's 10-year securities 0.03 percent to 1.75 percent.

Crude oil's strong performance on Tuesday proved to be beneficial to the loonie, according to The Canadian Press. The energy commodity is the top export of the natural-resources-rich nation.

Category: Industry News

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