The Canadian dollar fell against its US counterpart yesterday, but managed to outperform the euro and the Japanese yen. Today, the Canadian currency remained near yesterday’s close, waiting for Bank of Canada’s rate decision.
The fall of the loonie against the greenback can be explained by the negative data from the United States. The USA is Canada’s major trading partner, therefore the performance of the US economy has a great impact on Canada’s economy and currency. The data from Europe was also negative, reducing the appeal of higher-yielding risky currencies, including CAD.
The weakness of the euro against the loonie can be explained. The fall of the yen looks more puzzling. Canada’s central bank will announce its monetary decision today and that might the boost for CAD. It is unlikely that the bank change its interest rates, but it is encouraging for investors to know that the BoC is able to keep rates unchanged in times when most developed nation attempts to lower their borrowing costs.
USD/CAD traded at 0.9864 as of 5:40 GMT today, following yesterday’s rise from 0.9861 to 0.9867. EUR/CAD was at about 1.2364 after the drop from 1.2412 to 1.2367 on the previous session. CAD/JPY traded near 79.42 after yesterday’s rally from 79.41 to 79.51.
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