THE decline in the oil price has seen the Canadian dollar slide against the resurgent greenback from its recent flirtation with parity. Due to the link between the oil price and the Canadian currency, since Canada is a major producer of oil, any further weakness in the oil price could well undermine the loonie further. Look to buy US dollar- Canadian dollar around C$1.0160 for a move towards C$1.0480. CMC Markets spread on US dollar-Canadian dollar is C$1.0260-C$1.0264.
The dollar has been the safe haven currency of choice during the recent bout of risk aversion that has afflicted the market. It has been rising against most G7 currencies and also emerging market currencies, including against the Polish zloty. The zloty is likely to suffer from further weakness if general risk sentiment continues to dominate the market. Some recent profit taking in US dollar-Polish zloty after a break out to the upside earlier this month is a buying opportunity, and investors should look for Pz3.4000 as a good entry point. Capital Spreads quotes Pz3.2200-Pz3.2250.
The Australian dollar has fallen in line with risky assets for the past couple of weeks, however, once the markets settle down the Aussie should be one of the first currencies to bounce back. Australia did not suffer as badly as other western nations during the recession and its financial position looks healthy compared to the problems in the West. Commerzbank has even called the Aussie the next safe haven currency. Spreadex offers a spread on the Australian dollar-US dollar of $0.8724-$0.8734.
Euro-sterling has settled around the £0.8600 level since the UK election, but questions remain as to which side of the pair will see the next bout of weakness. Many will be eyeing George Osborne’s comments next Monday to see just how workable the first round of government cuts will be, while sovereign debt woes could continue to plague the Eurozone. The IG Index price on euro-sterling is £0.8560-£0.8562.