CAD is Just in a Ride Up

By K.T. Jagannathan

With speculation running high on the possible successor to Bill Morneau, who quit as the country’s finance minister on Monday, the Canadian dollar has firmed up considerably against the American dollar. Often, investors exhibit more than a cursory interest in nomination to such a key ministry in any government. Will Prime Minister Justin Trudeau invest his faith in his deputy and nominate him for the coveted position?

As discussions rage, the Canadian dollar turned stronger in intra-day. Market observers suggest that this was perhaps the highest intra-day score for the Canadian dollar since January 27. The finances of the Canadian government haven’t been on a sound footing. The deficit is predicted to be around 16 per cent of the country’s gross domestic product. An unstable CAD (Canadian dollar) could unsettle the trading scene for Canada. Of course, the Greenback has shown a propensity in the past few days to head south against a basket of other major currencies.

Indeed, the big numbers on the economic front have not been quite encouraging for the U.S. Is a firming currency good for Canada? As the debate sets in, the country has to contend with a dip in oil prices in the wake of competitive cooperation among the OPEC (Organisation of Petroleum Exporting Countries) and other producing nations. After all, oil is one of the major export items for Canada. Even as the guessing game is on over the new head of the finance ministry, the country’s inflation number is set to be out on Wednesday. Indeed, the week is set to witness exciting action.