The Canadian dollar fell today, hurt by the drop of crude oil prices and concerns about the future of trading between the United States and Canada. The currency still managed to beat the very weak Japanese yen.
The Canadian dollar faces the same problems as the Mexican peso as both Mexico and Canada have strong trading ties with the USA. And with President-elect Donald Trump wanting to rework the North American Free Trade Agreement or dismiss it completely, those ties can be damaged. Some analysts argue that Trump’s presidency may prove beneficial to Canada in the long run if he fulfills his promise to “make America great again,” but for now markets do not look kindly on the currencies of the US trading partners.
Adding to the woes of the Canadian dollar was the drop of crude oil prices. Performance of the Canadian currency and moves of crude oil prices have strong correlation. And with persisting oversupply and skepticism about the OPEC production cut agreement, crude finds little demand from traders.
USD/CAD rose from 1.3422 to 1.3469 as of 23:27 GMT today. EUR/CAD advanced from 1.4639 to 1.4662. At the same time, CAD/JPY rallied from 78.69 to 79.32.
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