USD/CAD Canadian Dollar 2012 Wrap up

USD/CAD Canadian Dollar 2012 Wrap up

The Canadian dollar has been range bound and had to react to world economic, political and social events outside its borders and with very little control of the outcome. Canadian fundamentals are strong although there are some manufacturing and housing question marks that could slow growth in 2013. In 2012 Canadian equities under performed their international peers and there is an expected recovery in Energy and resource based companies in the new year. The USD/CAD Started the year at 1.02 and finished the year at 0.9933 a 2.8 percent appreciation for the loonie in 2012. The CAD started the year on a positive note and reached a 7 month high in April.

The European crisis hit in May and erased all the gains that the CAD had accumulated versus the USD up to that point. Investors sold the loonie versus the dollar looking for a safe haven, depreciating the Canadian dollar above parity. It was not until the beginning of June that the CAD was able to appreciate versus the US dollar, aided in fact by the decision by the Fed to extend the Quantitative easing program and keep interest rates low for the foreseeable future. Over the summer the uncertainty surrounding the potential Greek debt default made investors turn to the US dollar. The USD/CAD reached close to 1.0350 in June which turned out to be the yearly high for the US dollar. The loonie started to appreciate until reachi