Loonie benefits from fiscal cliff deal

Posted On: January 02, 2013

The monetary unit of Canada pushed to its top value in 90 days against the U.S. dollar on Wednesday in the aftermath of U.S. political leaders passing a deficit-reduction plan that blunts the threat of a recession in the globe's largest economy, according to Bloomberg.

The deal approved by the U.S. Senate on New Year's Eve proved to be beneficial to the Canadian dollar while the monetary unit also benefited from gains to crude oil, which is the natural-resources-rich nation's top export.

"General risk sentiment is improving," chief economist David Watt with HSBC Holdings Plc in Toronto told the news source. "The fiscal deal in the U.S., that's been holding markets back, so the fact they got an agreement basically could take a source of uncertainty away from markets."

The Canadian dollar notched its biggest intraday leap on Wednesday since the middle of September.

Reuters reports the possibility of U.S. leaders not passing the fiscal cliff threatened to push the Canadian economy into a recession as well, as the two nations share strong relations for commerce and trade.

Category: Industry News

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