The Canadian dollar today extended its losses against the US dollar for the third consecutive day as global crude oil prices fell to lows last seen in December 2018. The Commodity-linked loonie’s performance was boosted slightly by the Canadian GDP data, but the risk-off market sentiment created by the Chinese coronavirus headlines hindered its rally.
The USD/CAD currency pair today rallied to a high of 1.3465 from an opening low of 1.3386 but as off its daily highs at the time of writing.
The Canadian dollar has been losing ground against the weakening greenback driven by the massive plunge in global crude oil prices this week. Coronavirus fears drove the drop in crude oil prices as investors expect global demand to decline even as OPEC+ struggle to cut their output. The release of the Canadian GDP report for Q4 2019 by Statistics Canada triggered a brief spike by the loonie as the print met expectations by coming in at 0.3%. However, the jump was short-lived as the West Texas Intermediate continued to trade near 44.96, putting it on track for a 15% weekly loss.
The release of weak US personal consumption expenditure report for January by the Bureau of Economic Analysis had a muted impact on the currency pair, despite American personal spending contracting in January. The greenback’s weakness, as reflected in the US Dollar Index did not help the loonie, which was much weaker than the dollar.
The currency pair’s performance over the weekend is likely to be affected by crude oil prices and geopolitical events.
The USD/CAD currency pair was trading at 1.3458 as at 14:23 GMT having risen from a low of 1.3386. The CAD/JPY currency pair was trading at 80.61, having dropped from a high of 81.92.
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