The Canadian dollar bounced today, trimming yesterday’s losses versus its US peer and the euro. The currency also extended its rally versus the Japanese yen for a third straight session.
The loonie will likely have hard times keeping gains considering that fundamentals are not particularly supportive for the currency. Sluggish global economic growth and weak commodity prices are not helpful for the growth-related Canadian currency. Additionally, the Bank of Canada is not likely to raise interest rates in the near future, while prospects for tighter monetary policy from the Federal Reserve should continue to push the US dollar against other currencies, including the Canadian dollar.
Yesterday’s economic data from Canada was not helpful either. The monthly seasonally adjusted annual rate of housing starts was at 192,368 in August, down from 199,813 in July. It was below the median forecast of 197,000.
USD/CAD fell from 1.0983 to 1.0978 as of 3:00 GMT today after reaching the low of 1.0958 intraday. EUR/CAD declined from 1.4210 to 1.4192. CAD/JPY rose from 96.67 to 96.83.
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