The Canadian dollar also referred to as the ‘loonie’ today rallied higher against the US dollar as oil prices soared during the Asian session. However, the loonie’s gains were short-lived as oil prices quickly fell during the European session reversing the USD/CAD currency pair’s losses and launching a sustained rally.
The USD/CAD currency pair today rallied from a low of 1.3040 to a high of 1.3107 as oil prices fell and the greenback recovered and was near its daily highs at the time of writing.
The currency pair traded with a bearish bias at the start of today’s session as the loonie exhibited strength boosted by higher oil prices amid rising tensions in the Gulf region. However, the currency pair rallied higher during the European session as oil prices fell and the greenback recovered to send the pair soaring in a massive rally. The West Texas Intermediate steadily fell from a high of 57.01 to a low of 55.89, which was near its opening low of 55.72. The decline in oil prices seems to indicate that the markets have already priced in the impact of possible supply disruptions in the Gulf region.
The lack of any major releases from the Canadian and US dockets meant that the pair’s performance was largely influenced by crude oil prices and the greenback’s performance as tracked by the US Dollar Index.
The currency pair’s short-term performance is likely to be affected by global crude oil prices and geopolitical events.
The USD/CAD currency pair was trading at 1.3110 as at 15:11 GMT having rallied from a low of 1.3040. The CAD/JPY currency pair was trading at 82.24 having fallen from a high of 82.71.
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