03 Dec Canadian Dollar Strengthens as Oil Prices Climb
The Canadian dollar has strengthened against the US dollar as the value of Oil strengthens and additional jobs are added to the Canadian economy. In fact, this past week the loonie has rose 1.8%, making it the greatest gain in 8 months.
Global News reports that due to the announcement that OPEC has agreed to cut its oil production, Oil prices are expected to rise and as a result will also continue to boost the value of the loonie. The Canadian economy is preforming strong following the US election, as the Canadian unemployment rate drops to 6.8% and over 10,000 new jobs have been added in the month of November.
Granted that the Canadian dollar is driven by Oil, as the price for Oil increases so will the value of the loonie in comparison to its counterpart, the US dollar. However, with higher oil prices and a stronger Canadian dollar it is not unlikely for the Federal Reserve to intervene and increase interest rates as a means of strengthening the US dollar. This means that as the US dollar strengthens due to higher interest rates, the Canadian dollar will weaken in comparison.
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