The Canadian dollar today dropped significantly against the US dollar as the risk-off sentiment in the markets drove the USD/CAD currency pair to new highs. The loonie’s slide against the greenback was further accelerated by the tariffs imposed by President Donald Trump‘s administration against Canadian imports.
The USD/CAD currency pair today rallied from an opening low of 1.3111 to a high of 1.3199 in the early American session.
The currency pair’s rally began yesterday in the early European session as the dollar gained ground against the euro, which translated into gains against the loonie. The recent spat between President Trump and Canada’s Prime Minister Justin Trudeau at the G7 summit is likely to lead to more tariffs against Canadian exports, which has spooked most investors who have ditched the loonie. The Canadian existing home sales data for May released today contracted by 0.1%, which was better than the expected 1.4% contraction, but had a muted impact on the pair. The Canadian manufacturing sales for April released by Statistics Canada declined by 1.3% versus the expected 0.6% growth.
The US dollar was further boosted by the recent interest rate hike by the FOMC and the promise of more rate hikes this year. The University of Michigan consumer sentiment survey released today, which came in at 99.3 versus the expected 98.5 and the previous 98.0 also boosted the currency pair.
Given the upcoming weekend, the currency pair’s future performance is likely to be affected by geopolitical events affecting the US and its trading partners.
The USD/CAD currency pair was trading at 1.3195 as at 14:58 GMT having rallied from a low of 1.3111. The CAD/JPY currency pair was trading at 83.77 having dropped from a high of 84.46.
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