The Canadian dollar dropped against its major counterparts today, erasing yesterday’s gains. The currency dropped as prices for crude oil declined while concerns about global growth resulted in the market sentiment that was adverse to riskier commodity-related currencies.
Futures for crude oil sank almost 7 percent in New York today as US inventories of crude continued to grow, reaching yet another record. Oil is the major export of Canada, meaning that performance the Canadian currency strongly correlates with moves of oil prices. The currency was rising previously as prices for crude rallied.
There were also other reasons for the loonie to fall. Signs of economic slowdown in China, worse-than-expected employment report from the United States, concerns about the situation in the eurozone, particularly Greece, — all these are reasons for the risk-averse sentiment on the Forex market and the subsequent drop of the Canadian dollar.
USD/CAD jumped from 1.2415 to 1.2579 as of 19:00 GMT today. EUR/CAD surged from 1.4250 to 1.4360 while CAD/JPY sank from 94.66 to 93.34.
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