The Canadian dollar fell against safer currencies today, but advanced against riskier ones, after negative news from China and uncertainty of the eurozone’s future made Forex speculators to shun risk.
China reported that its trade deficit widened more than expected, reaching the highest level in two decades. As can be expected, markets didn’t like the news. Commodities slid, dragging down commodity currencies. Crude oil tumbled as much as 1.9 percent. China is the second-biggest oil consumer in the world.
Performance of the Canadian currency depends on commodities, therefore it’s no surprise that it fell against the greenback and the yen. The loonie (as the currency nicknamed) managed to outperform some other commodity currencies, including the Australian dollar, as Canada’s major trading partner is the United States, which have a recovering economy, while Australia’s economy depends mostly on Asia and China in particular.
USD/CAD advanced from 0.9906 to 0.9933 as of 19:41 GMT today, while CAD/JPY went down from 83.23 to 82.75. AUD/CAD dropped from 1.0464 to 1.0429 and the daily minimum was 1.0403 — the lowest since January 2.
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