Forex News – Canadian dollar strengthens on risk appetite ahead of Ecofin meeting

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The euro is up against the dollar compared to Friday due to improved risk appetite on optimism that European officials are taking steps to tackle the sovereign debt crisis. Speculation is growing that European officials will agree on how to leverage the EFSF rescue fund and will progress on debt talks at the Eurogroup summit on Tuesday and Wednesday. French and German officials are expected to discuss deeper integration measures aimed at strengthening fiscal discipline by euro-zone governments. EURUSD hit a day high of 1.3397 in the earlier European session and fell to correct in the US session to touch a low of 1.3297. Euro remained higher in today’s US session versus Friday’s.

 

The dollar index, which measures the performance of the greenback against a basket of six major currencies, dropped to 9.144 in today’s North American session compared to Friday’s 79.688 and the US dollar weakened as risk appetite revived and global stock markets rebounded.

 

Sterling was not affected by UK data showing that sales volumes in Britain have slumped to their lowest level since March 2009. GBPUSD took direction from EURUSD and rose against a weaker dollar to hit a day high of 1.5593, up 0.68 percent from Friday. Cable eased lower in New York trading to 1.5487.

 

Against the Japanese yen the dollar was 1 percent on the day. USDJPY rose to a high of 78.22 in the US session from the day low of 77.45.

 

The Canadian dollar hit a one-week high against the U.S. dollar today on increased risk appetite due to investor hopes for policy action from euro-zone. This led to higher curde oil prices, which is Canada’s major export. Crude oil passed the critical key resistance level of US$100 a barrel. The Canadian dollar gained 1.6 percent against the greenback since Friday’s close. USDCAD fell to a low of 1.0303 versus Friday’s close of 1.0467.