The Canadian dollar surged to a 13 1/2-year high Monday - gaining almost a full U.S. cent - as a sharp increase in crude oil prices fired up gains against the U.S. greenback. Posted on 09/19/2005 9:21:13 PM PDT by M. Espinola
The Canadian dollar surged to a 13 1/2-year high Monday - gaining almost a full U.S. cent - as a sharp increase in crude oil prices fired up gains against the U.S. greenback.
The loonie was trading during the day as high as 85.74 cents US, up 0.9 of a cent from Friday's close of 84.84 cents U.S. It later closed at 85.57 cents US, up 0.73 cent,.
"This is the highest we've been since the month of January 1992," said George Davis, chief foreign exchange technical analyst with RBC Capital Markets.
"The market is starting to refocus on the positive correlation between oil prices and the Canadian dollar. So, obviously with oil up over $3 (US) a barrel so far today, we've seen some fairly substantial interest to by the Canadian dollar on the back of that."
During afternoon trading on the New York Mercantile Exchange, light sweet crude for October delivery jumped by $4.39 to close at $67.39 US a barrel, amid concerns that tropical storm Rita, gaining strength off the Bahamas, could turn - as hurricane Katrina did - toward U.S. energy facilities in the Gulf of Mexico.
That jump came even as OPEC ministers, meeting in Austria, discussed raising the organization's output ceiling by 500,000 barrels a day or simply making available two million extra barrels each day in an effort to ease worries about refinery shutdowns and a potential winter shortage.
On foreign currency markets, the loonie was also making gains against the euro, the pound sterling and the Japanese yen.
Davis said a 87-cent loonie is possible in the near term, especially if oil prices stay buoyant, but he warned that a high-flying dollar could spell more trouble for the Canada's manufacturing sector.
"Because most of our manufacturing sector is exporting goods to the United States, with an appreciating currency obviously it has a negative impact on the demand for those goods because they become more expensive for Americans," Davis said.
I thought the Canadian "Loonie" was there two dollar coin
I've heard the two-dollar coin referred to as a "Twonie" (i.e, too-nie). That makes the combination of the two coins a "Loonie Twonie". Th-h-h-at's All, Folks!
Twonie = 2 dollar coin
That would be two loons, right? One on each side. :-)
The two-year Canadian bond rose 3 Canadian cents to C$99.07 to yield 3.192 percent, while the 10-year bond gained 11 Canadian cents to C$104.71 to yield 3.91 percent.
The yield spread between the two-year and 10-year bond moved to 71.8 basis points from 71.8 at the previous close.
The 30-year bond advanced 36 Canadian cents to C$114.00 to yield 4.197 percent. In the United States, the 30-year treasury yielded 4.565 percent.
The three-month when-issued T-bill yielded 2.83 percent, down from 2.84 percent from the previous close.
There are other factors including oil, which Canada has an abundance of.
Canada's Dollar Higher on Rate Prospects, Rise in Commodities
``The Canadian dollar remains very firm on the FX market against all major currency pairs,'' wrote Shaun Osborne, currency strategist at Scotia Capital in Toronto. ``Key commodity benchmarks help to support the unit, with gold at a new 17-year high.''
A report today showed an increase in foreign purchases of Canadian securities.
International investors bought C$3.34 billion ($2.83 billion) of Canadian stocks, bonds and other securities in July, Statistics Canada reported in Ottawa. It was the biggest monthly amount this year and exceeded economists' forecast of C$2.3 billion, based on a median estimate in a Bloomberg survey. In June, net purchases decline C$2.37 billion.
U.S. Dollar Falls as Traders Reduce Bets Before Fed Policy Meeting
It is the $1 coin. The Twonie is the $2.
In 2003, and in celebration of the 50th Anniversary of the Coronation of Her Majesty Queen Elizabeth II, the Royal Canadian Mint introduced a seventh effigy, the fourth to feature the Queen’s image.
Check out this $100.00 Canadian Gold Dollar Coin
The 2004 'Lucky Loonie' celebrates Canada's Olympic athletes and underscores their commitment to sports excellence. The one-dollar coin was minted for general circulation but was also presented to each member of the 2004 Canadian Olympic Team as a good luck charm during the Athens Games.'Lucky Loonie'.
60th Anniversary VE Day Nickel The 2005 Victory in Europe Anniversary Nickel honours the 60th anniversary of the end of WWII. This special circulation coin is a representation of the 5-cent coin created in 1943 to promote the Canadian war effort. (See page 3 to view original (1943-1945) wartime coin)
That's OK, bud. The loonie is the Canuck buck, but if you want to see the Quenn with a bare (bear, actually) behind, the twonie is the coin you want.
(Note the post a couple above for confirmation.)
You may read that in the press, but is in direct contradiction to classical economics. The value of the Loonie (or any other currency) is wholly a function of monetary policy.
Hurricane season is not over yet and we could still have additional 'energy' flow disruptions which in turn will jack up the 'energies' and will also be effecting trending in stock indexes as well as key currencies. It's Loonie!
That would be two loons, right? One on each side. :-)
A loon on one side ... and some sort of water-bird on the other!
If you go into any tourist store in Cottage Country in Ontario and there are many a picture and/or sculture of the loon.
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