The Canadian dollar attempted to rally today but failed to do so against the US dollar and the Japanese yen, though it kept most of its gains versus the euro. There were two reasons for the underperformance: slowing inflation in Canada and the sharp drop of oil prices.
Canada’s Consumer Price Index showed no change in August compared to July after rising 0.2 percent in the previous reporting period. The core CPI increased 0.1 percent while it also rose 0.2 percent in July. Both of the readings were in line with market expectations.
Crude oil was falling yesterday and accelerated its slump today. Yesterday’s comments from the Federal Reserve fueled concerns about global economic growth, and this resulted in a negative outlook for fuel and energy demand.
USD/CAD rose from 1.3180 to close at 1.3216 while it touched the low of 1.3011. CAD/JPY opened at 91.01, rallied to the session high of 91.72 but backed off to settle at 90.72. Meanwhile, EUR/CAD dropped from 1.5065 to 1.4921, and its daily minimum was at 1.4855.
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