Canadian dollar exchange rate: CAD direction will, unfortunately, be determined via headline watching again

Last Updated on Wednesday, 08 February 2012 13:28 Written by Will Peters Wednesday, 08 February 2012 13:26

The Canadian dollar has advanced a little against the US dollar in a more positive global market environment.

The latest spot exchange rates: Pound Canadian dollar exchange rate is 0.5% higher at 1.5804, the US dollar Canadian dollar exchange rate is marginally lower at 0.9940 and the euro Canadian dollar exchange rate is 0.08% higher at 1.3202.

Shaun Osborne at TD Securities sums up the position the Canadian dollar finds itself in:

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"That 'imminent' deal on the Greek debt restructuring might just be in the bag now, if the latest smoke signals from Athens are correct. Risk sentiment has nudged a little higher this morning as a result, lifting equities and depressing the USD but movement in the FX market remains rather circumspect.

"Investors either want proof that a deal is really in hand – or are perhaps wary of the buy-the-rumour-sell-the-fact reaction in risk assets when confirmation finally comes. Absent any major data today, it will be another session of headline watching – unfortunately."

Pro-risk sentiment has driven fellow commodity currencies AUD and NZD to the top of the overnight G-10 currency performance league.

However, the CAD is not really participating in the spreading joy and remains something of an under-performer on the crosses overall.

"While this positive sentiment has helped risk currencies maintain yesterday’s gains – and marginally extend them – there remains a considerable amount of event risk in the coming sessions and the direction is certainly not clear. In particular given the thin data day ahead, we remain stuck to headlines from Europe to provide further direction," says Osborne.