The Canadian dollar fell today after the nation’s trade balance worsened unexpectedly. The currency is trying to regain its footing with the help of crude oil rally.
Canada’s trade deficit widened from C$628 million in January to C$1.9 billion in February. It was a total surprise to economists who had promised the trade balance to turn into a surplus of C$0.9 billion.
There is a hope for the loonie to rebound with the help of crude oil. Moves of the Canadian currency are strongly correlated with the performance of the commodity, meaning that the current rally of oil may result in a bounce for the Canadian dollar. Yet it will not be an easy feat to achieve due to the risk-negative sentiment prevailing on the market.
USD/CAD was up from 1.3087 to 1.3137 as of 21:48 GMT today but retreated from the daily high of 1.3218. EUR/CAD rose from 1.4904 to 1.4949, and its session maximum was at 1.5027. CAD/JPY sank from 85.05 to 83.94, and its daily low of 83.55 was the lowest since March 1.
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