Canadian Dollar Follows Crude Oil in Slump

The Canadian dollar dropped against other major currencies during Friday’s trading. Unlike in the case of the Great Britain pound, the reason for the drop was rather obvious — the big slump of crude oil prices.
Both West Texas Intermediate and Brent grades of crude sank more than 2 percent on Friday. The reason for the drop was concerns about oversupply on the market. The unexpected growth of the US crude oil inventories last week, the first increase of US oil rigs number for the first time after the decline for 29 consecutive weeks, the prospects for return of Iran to global markets — all those factors promise increased supply to the already oversaturated market.
The Canadian dollar usually moves in tandem with crude oil, and the recent drop of oil prices dragged the currency down. But it was not only the crude that hurt the loonie, as the data released earlier this week showed a surprise decline of Canada’s gross domestic product.
USD/CAD closed at 1.2259 today after opening at 1.2543 and rallying to the daily high of 1.2600. EUR/CAD rallied from 1.3901 to 1.3945, reaching the session high of 1.3983 intraday. CAD/JPY dropped from 98.06 to settle at 97.68 while its intraday minimum of 97.34 was the weakest rate since April 21.

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