The Canadian dollar went lower against its major counterparts, the US dollar in particular, tracking the decline of crude oil. The currency is attempting to recover right now.
The Canadian currency is strongly tied to the performance of crude, and lately the correlation became even stronger than usual as the loonie was moving in lockstep with moves of oil prices. Therefore, it was unsurprising that the currency fell today as crude oil was falling as well.
The drop against the US dollar can also be explained by profit-taking. The loonie was moving higher versus the greenback since January, becoming very overbought, and analysts said that a correction was long overdue.
Yet crude has bounced back currently, meaning that the Canadian dollar has a chance to rebound too.
USD/CAD rose from 1.3024 to 1.3068 as of 15:44 GMT today. EUR/CAD was up from 1.4675 to 1.4708, and its daily high was at 1.4749. CAD/JPY traded at 85.46 after opening at 85.58 and falling to the daily low of 85.06.
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