The Canadian dollar fell versus its US counterpart today as a range of factors were supporting the greenback. The losses against other majors were harder to explain considering that the trading environment looked favorable to the loonie.
One of the reasons for the US dollar’s strength was the fact that tensions between the United States and North Korea did not escalate further. Yet the same factor should have been supportive to the Canadian dollar as well because riskier commodity currencies have tendency to gain when the market sentiment improves. But that did not happen as loonie dropped even against the Swiss franc, which is considered to be a safe currency, making it less desirable in times of high risk appetite among investors.
To add to the confusion, prices for crude oil rallied on Tuesday. Usually the Canadian currency tracks oil prices closely, but that did not happen during the Tuesday’s trading session.
USD/CAD gained from 1.2108 to 1.2179 as of 22:01 GMT today. EUR/CAD rallied from 1.4472 to 1.4571. CAD/CHF declined from the opening of 0.7893 to 0.7881 after reaching the session high of 0.7915.
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