The Might of the Canadian Dollar

Wednesday November 10, 2010

It always seems to be the case that we end up talking about the US dollar and how it is standing tall against a myriad of other currencies. But this time we have a new story for you – and it stars the Canadian dollar instead.

Yes, it would seem as if it is pushing the boundaries of what it can achieve against the mighty US dollar at the moment. We had one day last month (October) when it reached parity with the US dollar, before dipping back down under the 1.0 amount once more.

But now it is doing it again – showing the world that it can take on the US dollar and come home with a significant amount to show for it. If you look at the day ending rates throughout the first few days of November, you’ll see a pattern that largely puts the Canadian dollar on a stronger footing against the US dollar. It even reached a rate of 1.0010 at the end of the day on the 9th.

But this is only half the story. The other half reveals that the Canadian dollar has managed to go above parity against the US dollar during the day on some other occasions, before being forced back down below it by the time the day is over.

It just goes to show how amazing the currency markets really are when you study them more closely. If you were just to take the closing rates of the day into account, you would get one distinct picture. But by following the daily ups and downs it reveals something quite different – something that puts the Canadian dollar in an arguably even stronger position.

There is no doubt that the US dollar isn’t in the strongest position it has ever been in. But with that said it is good to see the Canadian dollar stepping forward and pushing it hard to see what it can get away with. It is certainly grabbing the headlines as a result, both on Canadian run websites and on other major sites such as Reuters.

We’ll be watching too in order to see whether this story is going to run and run. Alternatively it might just fizzle out and see the US dollar getting back into its stride again. Whatever happens it will be fascinating to watch and we’ll be doing just that.