Canadian dollar: courtesy of Canadian press
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Ottawa, Jan 25 (Canadian-Media): The Canadian dollar rose to its its highest level since September and traded at 81.37 US cents in the morning against the U.S. dollar, as oil prices also rose while U.S. crude oil was at over $66 US per barrel after passing the $65 mark for the first time since 2014, media reports said.
In spite of the five percent rise of the Canadian dollar in the last month, analysts have repeatedly said that instability of North American Free Trade Agreement (NAFTA) poses a bigger risk when it comes to the strength of the Canadian dollar and added that much is dependent on the direction of the U.S. dollar.
"In Canada, we focus on the loonie, but it's been almost every currency globally that's been rising relative to the U.S. dollar," David Doyle, analyst at Macquarie Capital Markets was reported to state.
The U.S. dollar had reportedly fallen to a three-year low on Wednesday.
"While oil prices are helping, it's the cyclical decline in the U.S. dollar combined with decent domestic numbers that are bolstering the loonie for now," Bipan Rai, strategist at Canadian Imperial Bank of Commerce (CIBC) Capital Markets was reported to state.
"Unless oil prices reach a level that drive fresh investment in the oil sands sector, the loonie's rise will be mostly reflective of the U.S. dollar's cyclical downtrend," Rai added
Rai was reportedly hopeful that Canadian dollar would continue to trade within a range of 80 to 83 US cents in the coming month but he also added that any decline in global demand that would impact Canadian exports would also lower the value of the loonie.
(Reporting by Asha Bajaj)