The Canadian dollar retreated yesterday after the Forex market was shaken by the announcement that China’s economic growth may slow this year. The currency started today’s session with a little rally, but generally remained weak.
China reduced its growth target to 7.5 percent from 8 percent, spurring risk aversion among FX market participants. Commodity currencies were among the biggest losers as the Asian country is one of the largest world importers of raw materials and other goods. Canada’s dollar is considered to be one of such currencies, therefore it also took hit.
Analysts digested the news and weren’t too concerned. China remains a huge growing economy and a small decrease in the official growth forecast doesn’t change that fact. Moreover, the US economic reports that came out on Monday were better than expected, bolstering optimism for the global economy.
USD/CAD rose from 0.9893 to 0.9943 yesterday and traded at 0.9939 as of 00:18 GMT today. EUR/CAD went up from 1.3054 to 1.3141 and remained near that level today. CAD/JPY traded at 82.02 after it dropped from 82.58 to 81.96 on the previous trading session.
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