We ended our last post by warning that instability in the banking sector could push the value of the Canadian dollar lower versus the US dollar. Sure enough, overnight in Europe, another banking behemoth, Deutsche Bank, came under pressure with its share prices down close to 15% after a jump in demand by investors for insurance against potential default (credit-swap).
This pushed investors and global sentiment into risk aversion mode and helped increase the value of the US dollar against the Canadian dollar. The Canadian dollar has lost about ¾ of a cent and is currently trading at 1.3781, which is a two-week low against the US dollar. We see this as a good opportunity to sell US dollars for frequent US dollar sellers.
