3 May 2011

Canadian dollar goes up on election results

Although U.S. dollar caused oil and gold prices decline, the Canadian
dollar started rising this morning. Meanwhile traders were expecting
for Monday’s election results.
It became a relief for the market
to know that the Conservatives won a majority. It means we’ll see less
political uncertainty in the nearest future.  
Scotia Capital chief
currency strategist, Camilla Sutton, thinks that “Conservative program,
including tax and energy policy, is viewed more business friendly”.

In her opinion, during the previous few months loonie has underperformed as compared to other currencies. She noted it will probably catch up in the nearest future.
In the meantime, crude rose by 34% since mid-February. This hike was caused by the disruption of Libya oil supplies and a weak U.S. dollar. Usually, when the U.S. dollar goes up, oil prices fall.

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