C$ rises with oil, closing out worst year since 2008

Thu Dec 31, 2015 3:28pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Fergal Smith

TORONTO (Reuters) - The Canadian dollar rose on Thursday against its U.S. counterpart as crude oil prices rallied, ending a year in which it weakened by 16 percent and delivered its worst performance since the global financial crisis of 2008.

Corporate buying interest added to support for the currency in thin markets, according to Don Mikolich, executive director, foreign exchange sales at CIBC Capital Markets.

Foreign exchange desks were expected to close early ahead of the New Year's Day holiday, while the Bank of Canada also posted its official closing rate early.

The loonie, as Canada's currency is colloquially known, fell 16 percent to touch an 11-year low in 2015, pressured by deep losses for crude oil prices and two rate cuts from the Bank of Canada, while the U.S. Federal Reserve hiked rates for the first time in more than nine years.

Oil prices rose on Thursday, but suffered a second year of steep declines after a race to pump by Middle East crude producers and U.S. shale oil drillers created an unprecedented global glut that may take through 2016 to clear.

U.S. crude prices settled at $37.04 a barrel, up 1.20 percent, while Brent crude added 2.88 percent to $37.51.

The Canadian dollar closed at C$1.3840 to the greenback, or 72.25 U.S. cents, stronger than Wednesday's close of C$1.3885, or 72.02 U.S. cents.

The currency's strongest level of the session was C$1.3824, while its weakest level was C$1.3903. It had hit its weakest level in more than 11 years on Dec. 18 at C$1.4003.   Continued...

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch