News » Canadian Dollar Edges Higher even with Uncertainty

Some Canadian dollar billsCanadian dollar is edging higher on market uncertainty today, gaining a bit even as risk aversion creeps into currency trading. Loonie does remain near parity with the greenback, though. Gains have been limited by some of the uncertainty experienced by the financial markets.

In the United States, jobless data has shown that unemployment claims have dropped. Additionally, in Europe, leaders are insisting that progress is being made in the fiscal situation. These positive developments are helping risk appetite a bit, and helping the Canadian dollar.

However, there is enough uncertainty that the USD/CAD pair is fairly rangebound in the area of parity. Concerns about what Federal Reserve Chairman Ben Bernanke will say in his testimony before Congress are checking the gains of high beta currencies like the loonie.

Additionally, the conflicting signals in commodities aren’t helping much, either. Gold prices are gaining right now, but oil prices are moving lower. Indeed, since Canada relies more on oil prices, the drop below $97 a barrel is likely to have more of an impact on the loonie, limiting its gains, and resulting in vacillation between gains and losses against the US dollar.