Is the Loonie overvalued?

The Canadian dollar was one of the most popular currencies of the year, says Financial Times.

It says central banks and bond investors favoured the loonie, and also that it’s been widely considered as “one of the ‘commodity currencies’, because of Canada’s position as a large oil exporter…This means its value is expected to hold if commodity prices rise.”

Read: Slow but steady for the Loonie in 2012 and A shield from swings

Yet, the Canadian dollar was little affected by renewed hopes that American politicians will avert the looming fiscal cliff; traders were reassured after House Speaker John Boehner says he was optimistic a deal can be reached with President Barack Obama.

Optimism was further bolstered after Obama said he believes members of both parties can reach a framework on a debt-cutting deal before Christmas.

FT says some investors are worried the Canadian dollar’s become overvalued, with many industry execs expecting appreciation to remain stagnant.

Despite the fact traders also took in better than expected Canadian trade data—and an upward revision of third-quarter U.S. economic growth— the currency still slipped 0.01 of a cent, to 100.81 cents U.S., this morning.

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