Loonie Mixed Despite Positive Fundamentals

The Canadian dollar was mixed today, falling against such currencies as the US dollar and the euro but rising versus safe currencies, like the Japanese yen and the Swiss franc. Fundamentals specific for the loonie were largely positive, but apparently, factors that were affecting the Forex market in general had a bigger impact on the Canadian currency.
The main theme on markets today was the plans to renew trade negotiations between the United States and China. The news boosted the US dollar, dragging safer currencies down. That explains why the loonie fell versus the greenback but managed to gain on the yen and the Swissie. The US currency also got a boost from positive macroeconomic data in the United States, including strong employment growth and accelerating expansion of the services sector.
As for news specific to the Canadian currency, crude oil rallied today thanks to a bigger-than-expected drawdown from US oi inventories. Lawrence Schembri, Deputy Governor at the Bank of Canada, delivered a speech today, talking about economic developments in Canada and abroad. He mentioned the negative impact of trade wars:

Escalating trade conflicts and related uncertainty are taking a toll on the global and Canadian economies.

Yet he did not signal about the possibility of an interest rate cut, saying:

The current degree of monetary policy stimulus remains appropriate.

Absence of hints about monetary easing was considered a positive sign for the Canadian currency.
USD/CAD was down from 1.3222 to 1.3191 intraday but bounced to 1.3234 by 20:01 GMT today. EUR/CAD edged up from 1.4588 to 1.4604. CAD/JPY advanced from 80.44 to 80.86, touching the daily high of 81.13. CAD/CHF jumped from 0.7409 to 0.7455.

If you have any questions, comments, or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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