The surge in crude oil helped boost the Canadian Dollar, but will the rally in the equity markets last long enough to drive the Loonie even higher?
Strong gains in the U.S. equity markets triggered by a better than estimated ADP employment report helped to support the Canadian Dollar Wednesday morning. Additional support was provided by a sharply higher crude oil market as well as firmer gold and copper.
Crude oil rallied because of a smaller than expected rise in gasoline inventory. This was good news for the Canadian economy which relies heavily on crude oil exports.
Copper was up on speculation that a global economic recovery will lead to increased demand for the industrial metal. Gold traded higher as traders used this precious metal as a hedge against potential U.S. banking problems.
Look for continued weakness in the USD CAD if equity and commodity markets continue to post strong gains.