Saturday, January 9, 2010

Commodities Driving Canadian Dollar Up

Canadian dollar price going up on commodities

The Canadian dollar continues to strengthen against the U.S. dollar as commodity prices going up helped Canada's exports increase to their strongest level in about a year.

Against 13 of the 16 most traded currencies, the Canadian dollar price went up as a number of commodities like natural gas, crude oil and copper continue to go up in price.

Oil may be the best driver of the loonie, as it continues to rise in price in the midst of the cold spell hitting the world.

Crude oil for February delivery increased in price by 4.3 percent this week to $82.75 a barrel on the New York Mercantile Exchange. It went as high as $83.52, the top level since October 2008. Crude is Canada’s largest export.

Copper for March delivery topped at $3.544 a pound on Jan. 7, the largest price since August 2008.

Natural gas for February delivery soared to a one-year intraday high, $6.108 per million British thermal units.

About half of all export revenue from Canada comes from raw materials, making the long-term prospects of the Canadian dollar somewhat bullish.

Commodity currencies should do well over the next several years unless an unforeseen situation arises.

Canadian dollar price going up on commodities

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