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TORONTO (Reuters) - The Canadian dollar raced to its highest level against the greenback in over five weeks on Monday, thanks to an improved appetite for risk and stronger commodity prices, but it gave back a slice of its early gains ahead of Tuesday`s Bank of Canada rate decision.
The rally came alongside advances in global equities, as strong U.S. corporate earnings and news that lender CIT Group Inc was thrown a financial lifeline to avoid bankruptcy helped reinforce optimism for a global recovery.
That all helped to send the Canadian currency as high as C$1.1019 to the U.S. dollar, or 90.75 U.S. cents, which marked its highest level since June 12. The move followed last week`s 4.4 percent rise in the currency.
"Problems with the economy are still prevalent but people are driving stocks upward with speculation that the economy is in the recovery stage," said Tyson Wright, a senior foreign exchange trader at Custom House, a currency services firm in British Columbia. "Therefore risk assets are in demand and the Canadian dollar is gaining on the back of that sentiment."
By the end of the session the Canadian dollar backed down to C$1.1068 to the U.S. dollar, or 90.35 U.S. cents, but was still comfortably above Friday`s close of C$1.1161 to the U.S. dollar, or 89.60 U.S. cents.
Higher prices for oil and commodities, key Canadian exports, also helped lure traders to the currency.
Read the full article here.
The rally came alongside advances in global equities, as strong U.S. corporate earnings and news that lender CIT Group Inc was thrown a financial lifeline to avoid bankruptcy helped reinforce optimism for a global recovery.
That all helped to send the Canadian currency as high as C$1.1019 to the U.S. dollar, or 90.75 U.S. cents, which marked its highest level since June 12. The move followed last week`s 4.4 percent rise in the currency.
"Problems with the economy are still prevalent but people are driving stocks upward with speculation that the economy is in the recovery stage," said Tyson Wright, a senior foreign exchange trader at Custom House, a currency services firm in British Columbia. "Therefore risk assets are in demand and the Canadian dollar is gaining on the back of that sentiment."
By the end of the session the Canadian dollar backed down to C$1.1068 to the U.S. dollar, or 90.35 U.S. cents, but was still comfortably above Friday`s close of C$1.1161 to the U.S. dollar, or 89.60 U.S. cents.
Higher prices for oil and commodities, key Canadian exports, also helped lure traders to the currency.
Read the full article here.