TheÂ Canadian dollar today dropped significantly against theÂ US dollar asÂ theÂ risk-off sentiment inÂ theÂ markets drove theÂ USD/CAD currency pair toÂ new highs. TheÂ loonie’s slide against theÂ greenback was further accelerated byÂ the tariffs imposed byÂ President Donald Trump‘s administration against Canadian imports.
TheÂ USD/CAD currency pair today rallied from anÂ opening low ofÂ 1.3111 toÂ aÂ high ofÂ 1.3199 inÂ theÂ early American session.
TheÂ currency pair’s rally began yesterday inÂ theÂ early European session asÂ theÂ dollar gained ground against theÂ euro, which translated into gains against theÂ loonie. TheÂ recent spat between President Trump andÂ Canada’s Prime Minister Justin Trudeau atÂ theÂ G7 summit is likely toÂ lead toÂ more tariffs against Canadian exports, which has spooked most investors who have ditched theÂ loonie. TheÂ Canadian existing home sales data forÂ May released today contracted byÂ 0.1%, which was better than theÂ expected 1.4% contraction, but had aÂ muted impact onÂ theÂ pair. TheÂ Canadian manufacturing sales forÂ April released byÂ Statistics Canada declined byÂ 1.3% versus theÂ expected 0.6% growth.
TheÂ US dollar was further boosted byÂ theÂ recent interest rate hike byÂ theÂ FOMC andÂ theÂ promise ofÂ more rate hikes this year. TheÂ University ofÂ Michigan consumer sentiment survey released today, which came inÂ atÂ 99.3 versus theÂ expected 98.5 andÂ theÂ previous 98.0 also boosted theÂ currency pair.
Given theÂ upcoming weekend, theÂ currency pair’s future performance is likely toÂ be affected byÂ geopolitical events affecting theÂ US andÂ its trading partners.
TheÂ USD/CAD currency pair was trading atÂ 1.3195 asÂ atÂ 14:58 GMT having rallied from aÂ low ofÂ 1.3111. TheÂ CAD/JPY currency pair was trading atÂ 83.77 having dropped from aÂ high ofÂ 84.46.
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