Loonie climbs amid optimism about fiscal cliff discussion

Posted On: November 29, 2012
The monetary unit of Canada climbed to its top value in 21 days on Thursday against the U.S. dollar amid conjecture that the U.S. will avoid a recession, Bloomberg reports.

The loonie was heading toward both weekly and monthly gains with Friday being the final day of November. John Boehner, speaker of the U.S. House of Representatives, said he holds a bright outlook for the U.S. avoiding a fiscal cliff of $607 billion in automatic spending cuts and tax increases.

"The risk switch is on the 'on' position," amid "hopes of a deal which will avert a tumble into the fiscal ditch," states a client note penned Thursday by currency strategist Greg Moore with Toronto-Dominion Bank in Toronto, according to Bloomberg. "The high-beta currencies are not taking full advantage, with the Canadian dollar up only modestly."

The loonie also benefited from the strong performance of crude oil, which is the top export of the nation with an economy based on the shipment of its natural resources.

Reuters reports the commentary of President Barack Obama was reassuring regarding the fiscal cliff, which also benefited the Canadian dollar.

Category: Industry News

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