The Canadian dollar tumbled today against its U.S. counterpart, erasing the previous gains, and versus the euro after the crude oil’s prices fell and as China is going to cool its economy and put an end to the yuan’s dollar peg.
Two days ago the Canadian currency reached the parity with the greenback for the first time since June 2008, but it’s experiencing the sharp drop now, trailing the oil prices. The crude oil is the main nation’s export, therefore its performance significantly affects the loonie’s strength.
The analysts think the speculation that China plans to keep its economic growth and let the yuan appreciate also had the negative impact on the currency’s performance. The slower expansion of the Chinese economy means less demand for the commodities, resulting in weakening of the currencies, tied to the commodities.
USD/CAD soared near 1.0154 today as of 18:05 GMT, jumping from its opening level of 1.0017. USD/EUR traded at about 1.3700 after it opened at 1.3596.
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