Positive Fundamentals Fail to Provide Support to Canadian Dollar

The Canadian dollar was flat versus the US dollar and the Japanese yen and fell against the euro and the Swiss franc even though fundamentals should have supported the currency.

Prices for crude oil, Canada’s biggest export, jumped more than 2% in New York today. Crude gained as data showed bigger-than-expected draw from US inventories.

Canada’s trade deficit rose from C$0.6 billion in April to C$1.1 billion in May. Experts said that the report was not as bad as it might look because the increase of the deficit was mainly a result of a one-off event, namely the import of five new airliners. Moreover, both imports and exports were at the record high levels, suggesting that economic activity is very strong.

Building permits increased 8.9% in May. It was a far bigger increase than 2.5% predicted by analysts.

USD/CAD traded at its opening level of 1.2955 as of 18:34 GMT today. CAD/JPY traded at 87.35, also not far from the opening of 87.39. EUR/CAD rallied from 1.4705 to 1.4796.

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