The Canadian dollar was rather weak today due to the aftershock of Britain’s referendum that has ended in a vote to leave the European Union. The loonie joined other commodity currencies that were suffering from the resulting risk-negative market sentiment.
The potential exit of Great Britain from the EU could have long-term negative consequences for the world’s economy. There are even talks that another strong recession is possible. That promises lower demand for commodities, including Canada’s major export — crude oil. Additionally, the resulting need for economic stimulus may bring interest rate cuts back to the table.
The Canadian currency performed poorly against its US peer and even the euro, though the eurozone should have more troubles from the Brexit than Canada. What is even more surprisingly, the yen performed not that well, even though one might think that traders would be scrambling for the safety of the Japanese currency.
USD/CAD rose from 1.3033 to 1.3074 as of 22:26 GMT today. EUR/CAD went up from 1.4359 to 1.4405 after falling to the low of 1.4293. Meanwhile, CAD/JPY traded at 77.93 after opening at 77.78.
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