Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.
Loonie Hits 3-year HighFriday, March 11, 2011 > 09:14:54
The Canadian dollar hit its highest level since November 2007 on Wednesday, driven by rising oil prices and concerns about spreading Middle East conflict. The loonie rose 0.41 cents US, hitting $1.0335 on world markets in mid-morning trading.
Surging oil prices have boosted the global opinion of Canada's economic strength. Crude prices have jumped approximately 20 per cent since Feb. 18 in response to civil unrest in a number of Arab countries. As a result, the Canuck buck has gained two cents versus the American greenback. Many foreign currency buyers linked Canadian economic fortunes to rising petroleum prices. On Wednesday, crude prices were stable as the April contract on the New York Mercantile Exchange dipped five cents to $104.97 US a barrel in electronic trading. Traders in this market are now concerned that unrest in Libya and other countries could spread to Saudi Arabia, the world's biggest oil producer.
Bank of America Merrill Lynch raised its 2011 oil price forecast to $101 US from $87 US and expects Brent crude to average $122 US in the second quarter. But, earlier in the week, a report from investment house Brown Brothers Harriman said the common wisdom might overestimate Canada's link to oil prices.
The New York firm noted that crude oil prices have risen about 25 per cent since February. By contrast, the Canadian dollar has only moved up two per cent, an indication of a weak — not a strong — relationship between oil prices and the country's economy, BBH said.