Would The Canadian Dollar Stand Up Against The Euro?
Posted November 26, 2010
It’s an interesting question, given the fact that the Canadian dollar has been close to (and in fact has achieved) parity against the US dollar several times recently. Would it manage to give the Euro a run for its money during October?
Well let’s look back to see how things were left on the currency converter during September. The final rate back then was 0.7105, so we were looking to achieve something better than this, to whatever degree was possible. The first day of trading in the month (and the last one for the week) saw the Canadian dollar drop back to 0.7099, but this was such a small change that it didn’t cause concern.
The first full week saw a healthy jump on day one that left the Canadian dollar on 0.7143. This was a lot better, but could it maintain the lead over a longer period of time? It did in fact struggle to do just that, and by the time the week was done with on the currency markets the Canadian currency was left at the lower rate of 0.7058.
The following week saw a classic tussle between the two currencies. Neither one of them gave up a lot of ground on any particular day; the Euro was clearly not going to let the Canadian dollar get the better of it. This led to a closing rate for the week of 0.7059.
Once again the following week showed us that this was not destined to be a month of big changes. Big rises and falls might be dramatic but sometimes the story can be told in the minutiae of the events of the month. It was just this case with the Canadian dollar and the Euro in October. However the Euro would be the one to bite back as the next week came to a close. By this time the Canadian dollar had slipped back over the 0.70 barrier and finished up slightly below it on 0.6993. It may only be slightly beneath it but that small difference was pronounced to those who were watching.
It wasn’t until the 26th that the Canadian dollar managed to creep back over the line again, this time claiming a rate of 0.7020. We were down to the last few days of the month now though and it was clear that the Canadian dollar didn’t have too long to go to achieve a better rate than it had started with. If you remember the starting rate for October was 0.7105, and it didn’t look like it was going to achieve anything better than that. The biggest question was how close to it the dollar would be able to get.
Finally we got our answer as the markets closed on the 29th, ready for the Halloween weekend. The Canadian dollar finished on 0.7067, so it didn’t quite get the better of the Euro and finish on a much healthier rate. At least it didn’t drop too much ground in the process.