Canadian Dollar Suffers from Domestic Data & Crude Oil Prices

The Canadian dollar dropped against its most-traded rivals during the current trading session, driven down by unfavorable domestic macroeconomic data and the decline of crude oil prices.

Canada’s current account deficit widened to C$14.1 billion in the first quarter of 2017 from upwardly revised C$11.8 billion registered in the previous reporting period. That was a surprise to markets participants as experts had predicted a drop to C$11.4 billion. The report explained the result by the fact that “the goods balance moved from a surplus to a deficit.”

Meanwhile, prices for crude oil sank more than 1% today after traders returned to market after Monday’s holidays. Concerns about the global glut remained because market participants felt that output cuts made by the Organization of Petroleum Exporting Countries to reduce the surplus were insufficient as US oil producers simply replaced OPEC supply with theirs. Crude is Canada’s main export commodity, therefore moves of its prices usually have a big impact on performance of the Canadian currency.

USD/CAD traded at 1.3462 as of 16:15 GMT today, far below the day’s high of 1.3506 but still above the opening level of 1.3446. EUR/CAD gained from 1.5012 to 1.5048. CAD/JPY dropped from 82.67 to 82.26.

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