The Canadian dollar fell more than 1% against its major counterparts today as the sell-off of crude oil hurt the commodity-linked currency while poor economic data from China gave traders even more incentive to avoid currencies related to raw materials.
Crude oil prices declined on Tuesday as traders felt concern about the oversupply on the market. Oil dragged the loonie down as a large chunk of Canada’s export revenue comes from crude.
Additionally, the unexpectedly bad manufacturing report from China fueled concerns about global growth, making riskier currencies less appealing for investors. Furthermore, the unexpected interest rate cut from the Reserve Bank of Australia made market participants even more nervous and less willing to buy currencies linked to economic growth.
Tomorrow, the important report about Canada’s trade balance will be released, and it has potential to influence moves of the Canadian currency.
USD/CAD climbed 1.4% from 1.2529 to 1.2708 as of 20:04 GMT today, rebounding from 1.2462 — the weakest rate since June. EUR/CAD soared 1.2% from 1.4450 to 1.4629. CAD/JPY dropped 1.4% from 84.91 to 83.72.
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