CAD Stronger in Spite of Negative Factors

The Canadian dollar gained today even as the negative factors that were previously weakening the currency remained. Yet Forex market participants felt inclined to buy higher-yielding currencies even during these times of uncertainty.
The environment on the FX market remained the same: negative for riskier assets. Yet the loonie ignored that. Perhaps, an unexpected surge of optimism on other markets was responsible for the strength of Canada’s currency. Futures on crude oil added 0.2 percent to $79.36 in New York. The Standard & Poor’s 500 Index gained 0.7 percent and the MSCI All-Country World Index advanced 0.4 percent today.
The gains of the Canadian dollar against the euro are not surprising, considering a dim outlook for the shared European currency. The advance of the loonie versus the greenback can be explained by today’s poor macroeconomic reports from the United States. But the strength of Canada’s currency against the yen looks rather unexpected.
USD/CAD fell from 1.0287 to 1.0241 and EUR/CAD dropped from 1.2862 to 1.2791 (the lowest price since June 1) as of 21:18 GMT today. CAD/JPY advanced from 77.40 to 77.55, following the earlier decline to 77.04.

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