The value of the Canadian dollar reached its highest point in 90 days against the world's reserve currency on Thursday after having closed Wednesday trade north of parity against its southerly rival, according to published reports.
The loonie's upward tack was propelled by economic data indicating global manufacturing was influencing speculation about development and growth among the global economy,
according to Bloomberg. In turn, that prompted an increased appetite for assets considered more risky, such as the monetary unit of Canada.
Postmedia News
reports data about manufacturing pushed the loonie to close Wednesday above parity with the U.S. dollar, marking the first time the monetary unit achieved that accomplishment since the final day of October of last year. As compared to the U.S. dollar, the loonie closed the trading session on Wednesday at $1.0009, representing an upward tick of 37 basis points.
"The loonie's doing a bit better on the general positive outlook,"
foreign exchange trading vice president Michael O’Neill with RJOFX Canada with RJ O'Brien & Associates of Toronto told Bloomberg on Thursday. "That's partly from the China data last night and also in part because Europe hasn't cratered. There's also a bit more optimism surrounding the U.S. economy. What good for the U.S. is good for global growth; Canada is along for the ride."
By contrast, the value of the U.S. dollar dipped in value against 14 of its 16 counterpart currencies as a consequence of investors seeking out assets that deliver higher yields.
The loonie also benefited from economic data released by the Institute for Supply Management indicating U.S. manufacturing developed at its most rapid rate in seven months, according to Bloomberg. The U.S. is the nation's top partner for trade and commerce thus the country's monetary unit is sensitive to financial and economic developments and occurrences that impact the economy of the nation hosting the globe's biggest economic system.
The institute's index gained from 53.1 in December 2011 to 54.1 in January, which did not meet projections, according to a report issued by the Arizona group. But the metric did indicate the industry expanded since metrics bigger than 50 indicate expansion.
Production in Germany, the host of the euro zone's biggest economy, increased for the first time since September of last year, according to Bloomberg, which cited economic data on purchasing-manager indexes. Factories in China, host of the globe's most rapidly developing economic system and the globe's second largest behind that of the U.S., enhanced their production despite enduring weaker exports prompted by the sovereign debt crisis tearing through the euro zone.
"The Canadian dollar is being driven by the better-than-expected PMI data," states an email from currency strategist Mark McCormick with Brown Brothers Harriman to Bloomberg. "This has resulted in broad U.S. dollar weakness, a strong rally in equities and has boosted growth-sensitive currencies such as the Canadian dollar."
But The Canadian Press
reports the value of the loonie on Thursday morning began showing some chinks in the armor amid commodities' downward tack.
The price of crude oil, the top commodity of the nation with an economy based on shipping and exporting its natural resources, slipped on Thursday. The energy commodity continued a downward tack begun on Wednesday when economic data indicated supplies of oil in the U.S. increased last week significantly more than projected.
Another factor that is likely to impact the value of the Canadian dollar is Capitol Hill testimony from Ben Bernanke, chairman of the U.S. Federal Reserve. Bernanke is slated to address the House Budget Committee, indicating that the body he leads is likely to intervene in support of the U.S.' economy's recovery.
