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Loonie Up on Oil, Year End Selling
Published December 30, 2016
The Canadian dollar continues to benefit from the USD sell off and higher oil prices as the Loonie strengthens into the mid 1.34’s, finding support at 1.3435/45
The US dollar experienced a mini flash crash overnight against the Euro as the EUR/USD pair rose to 1.07 briefly only to retreat almost immediately back to 1.0540. Traders cited a handful of orders, thin markets, and year-end balancing as the reason for the sudden move
Oil prices edged down on Friday but headed for their biggest annual percentage rise since 2009, with world stocks also up nearly 6 percent over the year despite concerns over China's slowing growth and weakening currency.
In 2016, Brent has risen nearly 50 percent while WTI has climbed around 43 percent. A poll from Reuters showed that the price of oil will gradually rise to $60 per barrel by the end of 2017
Investors will look to the Baker Hughes rig count data out later today; last Friday’s data showed an eighth straight weekly rise in rig counts indicating US producers are starting to take advantage of higher oil prices
Canadian dollar strength may be temporary, as the greenback is expected to rise further in 2017, along with US Treasury yields, with Trump's policies seen boosting inflation and prompting the US Federal Reserve to hike interest rates more frequently
Wishing a Happy New Year and prosperous 2017 to everyone!