The Canadian dollar dropped against the US counterpart on Tuesday to touch its lowest in two weeks, as oil prices moved lower and the greenback gained strength. Prices of crude oil, one of Canadaâs main exports, declined due to concerns towards rising production levels in the United States.
The US dollar was stronger today following a comment made by Federal Reserve Bank of Philadelphia President Patrick Harker on Monday. Harker said that he supports an interest rate hike in March, adding that he believes rates should be raised three times in the current year. Philadelphiaâs Federal Reserve president is among the voting members of the Federal Open Market Committee, which decides interest rates.
The greenback was further supported by a report from the US Department of Commerce, which said that the goods and services deficit of the country declined by $1.5 billion in December 2016. However for full year 2016, international trade deficit rose by 0.4 percent from 2015, as imports surpassed exports by $1.9 billion. The report will likely support President Donald Trumpâs case for tougher approach on trade.
The increased strength of the US dollar weighed oil prices down, which extended losses that stemmed from growing worries that rising crude output levels in the United States could harm oil prices. A number of major producers in the Organization of the Petroleum Exporting Countries and outside it have been working on reducing a global supply glut, but their efforts could be derailed by rising production elsewhere.
USD/CAD traded at 1.3171 as of 18:50 GMT on Monday, after touching 1.3206 at 11:25 GMT, the pairâs strongest level since January 24. USD/CAD opened trading today at 1.3081.
If you have any questions, comments or opinions regarding the Canadian Dollar,
feel free to post them using the commentary form below.
