The Canadian dollar bounced after the initial drop today. While domestic fundamentals were somewhat beneficial, the main reason for the bounce was the decline of the US dollar.
The positive side of Canada’s economic data released today came in the form of the trade balance deficit that increased just marginally in January while experts had predicted a much bigger increase. The negative part of the story came from the Ivey PMI that dropped in February much more than had been anticipated.
Of course, the major theme for the currency market (and other markets as well) was the release of non-farm payrolls and reaction of the US dollar to the event. So happened, that the greenback did not react well. As a result, commodities (including crude oil) rallied, helping commodity-linked currencies in the process. The loonie, being correlated with performance of raw materials (oil especially), benefited from that.
USD/CAD declined from 1.3402 to 1.3320 as of 20:28 GMT today after rising to 1.3470 intraday. EUR/CAD opened at 1.4682, rallied to 1.4813 but pulled back to 1.4646 as of now. CAD/JPY gained from 84.78 to 85.58.
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