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Canadian Dollar mixed against major currencies

Blog by Shaun Kimmins | December 15th, 2008

(CEP News) - The Canadian dollar is mixed against major foreign currencies on Monday as it makes notable gains against the U.S. and Australian dollars.

The loonie is up 0.0141 to 0.8153 against the U.S. dollar, as the greenback suffers broad-based losses. The U.S. dollar index is now down 1.325 points to 82.319.

"The USD continues to look soft against many currencies in the short term. A consolidation / bounce in major commodities, equity indices and fixed income markets (yields) continues to support the idea of further short term gains for EURUSD and [generalized] USD weakness across the board," wrote Citigroup strategists in a research note to clients.

Despite its recent run as a safe-haven for investors, the U.S. dollar is selling off amid equity-market weakness, with the Dow Jones industrial average down 63.95 to 8565.73. Meanwhile, West Texas Intermediate crude oil futures contracts are up $2.94 per barrel to $49.22, which is contributing to the strength of the commodity-based Canadian dollar.

The loonie is up 0.002 to 0.5996 against the euro, but trending lower after being as high as 0.6045 at 8:15 a.m. EST. The euro is meanwhile up 0.309 to 1.3678 against the greenback.

The loonie is also up 0.89 points to 73.89 against the Japanese yen. The cross has moved gradually higher following the release of a lower-than-expected fourth-quarter Japanese Tankan survey released overnight.

Staying with Asian-Pacific crosses, the loonie is up 0.0084 to 1.2148. It had been as high as 1.2274 at 7:30 a.m. EST. The CAD/AUD owes much of its gains to the current strength in oil. Meanwhile, the loonie is down 0.0015 to 0.5348 against the pound sterling, on a sharp turn lower from 0.5435 levels at 8:15 a.m. EST.

RBC chief FX technical analyst George Davis wrote that the GBP/CAD (1.8699) sees the potential for further gains by the pound sterling.

"We continue to view pullbacks to support at 1.8384 as a short-term buying opportunity for a test of resistance at 1.8515. An hourly close above this level is required in order to sustain our bullish view, targeting 1.8619 and 1.8727 thereafter," he wrote.

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