Positive Fundamentals Help Loonie to Rally Despite Huge Drop of Oil Prices

The Canadian dollar gained on Thursday, though trimmed its gains by the end of the trading session. The currency managed to rally even as crude oil posted huge losses, falling more than 4% over the course of Thursday’s trading. There were several possible fundamental reasons for the good performance of the Canadian currency.
One of such reasons was optimism about the upcoming GDP report due for release on Friday. Analysts predicted that it will show growth by 0.4% in March after the drop by 0.1% in February. Quarter-on-quarter, growth is expected to be at 0.7% compared to 0.4% in the previous three months — the slowest in over two years.
Another positive factor was the removal by the United States tariffs on Canadian aluminum and steel imports earlier this month. With Canada ready to ratify the USMCA deal, it looks like the country is going to retain strong trade relations with its neighbor and the world’s biggest economy.
As for Thursday’s data, Statistics Canada reported that the current account deficit widened to C$17.3 billion in the first quarter of 2019 from C$16.3 billion in the previous three months, indicating a higher trade deficit in goods and services. Nevertheless, it was a better reading that a deficit of C$18.1 billion predicted by experts.
USD/CAD declined from 1.3519 to 1.3499 as of 21:20 GMT today, touching the low of 1.3485 intraday. EUR/CAD was down from 1.5046 to 1.5025, and its daily low was at 1.4994. CAD/JPY advanced from 81.05 to 81.15, though retreated from its daily high of 81.50.

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