Loonie halts bearish trend at four days

Posted On: January 29, 2013

Four consecutive trading sessions of losses halted Tuesday as the Canadian dollar gained in value against the world's reserve currency, according to Bloomberg.

The monetary unit of Canada had not dropped lower than $1.01 in Canadian currency against the U.S. dollar since the middle of last week, when the central bank reduced growth forecasts. And the loonie's losses during the past three trading sessions were believed to have been overdone.

"Given that it hasn't been able to break above C$1.01, we have seen some sellers come in and maybe position for a bit of a grind back towards parity," managing director of foreign exchange Blake Jespersen with Bank of Montreal told the news source on Tuesday. "It had a lot of momentum up to C$1.01, but since it's stalled, so I think you're seeing some momentum players come in and sell this with the view it's going to struggle moving much higher."

The monetary unit also was spurred higher by gains to crude oil prices, which is the top export of the natural-resources rich nation.

Reuters reports the loonie is likely to be impacted by the policy meeting of the U.S. Federal Reserve, which is convening two days of meetings beginning on Tuesday.

Category: Industry News

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