Canadian Securities Drive Canadian Dollar to Two-Week Record

The Canadian dollar jumped today, reaching the highest level in two weeks against its US counterpart and the Japanese yen, as foreign investors bought more Canadian securities than was predicted.

The purchases of the Canadian securities by foreign investors rose by C$11.8 billion ($12 billion) in July. That’s much better than the median forecast of C$2 billion and a huge improvement over June decline by C$3.4 billion. The MSCI World Index of stocks gained 0.6 percent, advancing for the fourth consecutive session.

The loonie (the nickname of the Canadian currency) advanced 1.9 percent over this week against the greenback, showing the biggest gain since July. The Canadian dollar rose even as fears about Europe intensified. Some analysts think that traders began to consider Canada’s currency as a haven from the crisis in the European Union. In such case the loonie can appreciate in times of uncertainty, even being “commodity” currency.

USD/CAD slumped from 0.9833 to the closing price of 0.9779, the lowest level since September 2, while during the trading session the currency pair advanced to 0.9859. EUR/CAD tumbled from 1.3647 to 1.3493. CAD/JPY climbed from 77.91 to close at 78.45, while intraday it reached 78.52, the highest price since September 2.

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