A slight rise in the exchange rate of the Canadian Dollar was seen as compared to their slightly superior older brother, the American Dollar. As the larger boost in the price cools down, the investors and traders make more careful decisions as they wait for the pending decisions by the U.S Central and Japanese banks.
The Canadian Dollar or as it is better known, a loonie, among foreign exchange traders, rose on Friday after seven days of experiencing low hits. This however, did not last for long as there were complications regarding a freeze suggested by Venezuela on the OPEC (Organization of Petroleum Exporting Countries) output and the increase in U.S crude stockpiles. There is still a wait for the interest rates to be set by the Bank of Japan and U.S Federal Reserve. Currency strategists eagerly await the announcement of the new oil prices till Wednesday.
Market analysts have determined that the American dollar will see a shocking rise instead of getting weakened by this move. According to the Federal Reserves’ most known policy makers, the Fed hikes may rise to 50 percent which is a lot higher than what the market will price in.
The U.S Dollar is said to hike even when there in case of a hold and seeing a dissenter appear or if the central bank takes a decision which points towards a better and more promising economic outlook.
The Canadian Dollar closed at C$1.3207 or 75.72 cents which is a few higher than what was experiencing after the Friday close: C$1.3214 or 75.68 U.S cents. The strongest state that the loonie has experienced was C$1.3135 while the weakest was C$1.3230.
Canada also experienced a boost in the main stock index on Monday due to higher oil prices giving a large boost to stocks prices for energy companies. This also caused big banks to experience a good enough gain as investors were confident about the Federal Reserve holding the rates steady throughout the week.
Canada’s biggest banks had been the ones to profit the most on the index with the Bank of Nova Scotia gaining 0.9 percent to C$70.56 and Toronto-Dominion Bank rising 0.6 percent to C$57.53. Along with banks financial groups also saw a good enough rise of 0.7 percent particularly mentioning Insurer Manulife Financial Corp which gained 1.3 percent to C$18.27.
U.S crude prices saw a boost of 1.6 percent to $43.71 per barrel. This is good news for oil exporting companies but not very good for consumers and importers.
Coming Friday, the inflation and retail sales data for Canada will be released. These might confirm the previous approximations of the inflation rate rising to 1.4 percent in August. The investors will have their eyes set on the new child benefit checks which will show signs for the boost in retail sales.
Canada has experienced an overall good week in the stock market and if the oil prices continue to boost further, there is a chance that the inflation rate may be a little lower than what has been foretasted.