The Bouncing Canadian Dollar – Is It On The Up Or On Its Way Down Again?
Some currencies just beg to be watched closely virtually all the time. And we can certainly say that of the Canadian dollar.
It has been affectionately called ‘the loonie’ for a long time, but there would seem to be a good reason for that. You see, according to many reports it has a tendency to be very unpredictable. You only need to read the article on the Reuters website - to learn that.
If we go back to New Year’s Day last year – 2008 – you will see the Canadian dollar bagging 0.6920 Euros for example. It then dropped steadily down to 0.6591 mid-month before finding its way back up again.
After that there were a few days of ups and downs, but only of the small variety. But then as March 2008 got going the loonie seemed to lose pace and start dropping quite remarkably against the Euro. It finished the month on a dismal 0.6162.
Then we were back to the ups and downs we’d seen before, where the Canadian dollar never really managed to hang on to any increases for very long at all. It took until October to grab back an exchange rate of 0.6706. But surprise, surprise – once again the loonie managed to drop behind.
It got as bad as going below the 0.60 mark in mid December that year, when the exchange rate fell to 0.5941. Any hope the Canadians must have had of getting a good exchange rate on their currency converter for the Euro must have vanished at that point. It didn’t regain the 0.60 region until five days into 2009, when it grabbed an exchange rate against the Euro of 0.6069.
It then fell back to 0.5976 on the 19th March, and got back to 0.60 again before dipping back a couple more times as March gave way to April. But since the 3rd April this year, the Canadian dollar has at least managed to stay above the 0.60 mark – currently languishing on 0.6358 on the 11th September.
But has the pattern been like this with every currency the loonie has gone up against?
Thankfully for the loonie the answer is no. In fact if you look at a chart for the currency up against the British pound you will see a very different picture. Overall the loonie has picked up remarkably over the same time frame, which just goes to show that even a volatile currency such as the Canadian dollar has its time against certain other currencies.
Back on that same start date in 2008, the loonie bagged 0.5075 British pounds in the exchange rates. It did drop below this mid-month, to 0.4986, and it stayed that way until the 24th when it picked back up again and managed to net a rate of 0.5014.
It then went between 0.50 and 0.51 for quite some time, until mid March when it dipped back to 0.4985 again. Things were up and down then for the Canadian dollar for quite a while, which gave us something to ponder over. Could the British pound be getting the best of it?
It dropped further to 0.4867 towards the end of March, and although the loonie briefly grabbed the limelight above the 0.50 mark once or twice, it had to wait until early May before achieving a figure of 0.5100.
It didn’t drop below the 0.50 mark again until early June, but from then until around the middle of August it spent more time below that line than it did above it.
December seemed to be the month where the loonie finally got some steam behind it though. Indeed it finished 2008 on 0.5603, and consolidated that leap by staying in that region and climbing to 0.5789 on the 6th January.
By the end of the month a high of 0.5922 had been reached, but since then the mid fifties have been where the loonie has preferred to settle. The latest rate at the moment is 0.5556, illustrating that mid fifties territory perfectly.
So what will happen now? Is the Canadian dollar back on the up again? Or is this going to precede a fall where the below 0.50 exchange rates will make another appearance?
There is no way of telling, but if we have learned one thing throughout this journey it is the fact that the loonie is liable to keep on going up and down like a yoyo for the foreseeable future.
