Canadian Dollar Ignores Positive Fundamentals amid Risk Aversion

The Canadian dollar fell today even though macroeconomic data released in Canada was good and crude oil continued to rally. The likely reasons for the underwhelming performance was risk aversion that took a firm grip on markets.

Canada’s manufacturing sales were up 1.0% in March, reaching a record. The report said that the rise was “reflecting higher sales in the transportation equipment and food industries.” The increase followed the drop by 0.6% in February.

Previously, the loonie was rising in tandem with crude oil. While crude continued to rally today, the Canadian currency did not join. That was because of political turmoil in the United States that was hurting riskier commodity currencies. The Canadian dollar fell even against its US counterpart, which itself suffered from US politics.

USD/CAD rose from 1.3604 to 1.3620 as of 19:14 GMT today. EUR/CAD rallied from 1.5076 to 1.5181, touching the highest level since November 9 intraday. CAD/JPY slumped as much as 1.9% from 83.11 to 81.55.

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