Canadian Dollar Ends Week Lower on Risk Aversion, Falling Oil Prices

The Canadian dollar ended the week lower, joining other commodity currencies in decline. The main theme of the week was risk aversion on the Forex markets, which made safer currencies the strongest, while hurting riskier currencies related to raw materials and growth.

The week started on a seemingly positive note on reports about a truce in the trade war between the United States and China. But the market sentiment quickly went south and deteriorated further in the second half of the week on the news about arrest of the chief financial officer of Chinese tech giant Huawei. The Canadian currency had its own negative factors as well in the form of the dovish policy statement from the Bank of Canada and tanking prices for crude oil.

The loonie rebounded by the weekend thanks to the positive employment data in Canada and disappointing US nonfarm payrolls. Also helping the currency was the rally of crude oil prices after the announcement of the OPEC+ oil production cuts.

The Australian dollar performed even worse than its Canadian counterpart, dragged down by Australia’s disappointing gross domestic product.

USD/CAD rose from 1.3236 to 1.3321, touching the high of 1.3445 during the week. EUR/CAD advanced from 1.5025 to 1.5160. AUD/CAD sank from 0.9765 to 0.9597.

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