The Canadian dollar dropped today as speculations about reduction of quantitative easing by the US Federal Reserve continued, trimming risk appetite of investors and making them less willing to buy risky currencies.
John Williams, the President of the Federal Reserve Bank of San Francisco, said the central bank may slow its $85 billion monthly asset-purchase program. Such speculations were present for some time, bolstering the US currency and weakening riskier ones.
Truth be told, this week’s macroeconomic data from the United States was not that good and did not support the outlook for smaller monetary easing. Perhaps it is the reason that helped the loonie to trim its drop versus the greenback. On top of that, crude oil rallied 0.7 percent to $94.96 per barrel in New York today.
USD/CAD rallied from 1.0155 to 1.0206 before trading at 1.0185 as of 22:33 GMT today. EUR/CAD went up from 1.3086 to 1.3123, while CAD/JPY edged down from 100.61 to 100.34.
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