The Canadian dollar rose today for the first time in four days against the dollar and in five days versus the euro after the report showed that the decline of Canada’s economy was in line with the forecasts.
Jim Flaherty, Canada’s Minister of Finance, said yesterday that the economic data may be negative and the analysts estimated that Canada’s economy shrank 0.1 percent. The report today about Canada’s gross domestic product proved these forecasts to be true. The market felt the relief as the economy wasn’t worse than predicted, pushing the Canadian currency higher.
The slowing economy isn’t good for the currency in the long run, of course. The investors are decreasing their bets that the Bank of Canada would raise the interest rates next month. The soft economy of the US, to which goes about three quarters of Canada’s exports, isn’t helping either.
USD/CAD fell as low as 1.0230 today after opening at 1.0323, but rebounded somewhat later and traded near 1.0310 as of 16:37 GMT. EUR/CAD went down from 1.4067 to 1.4006.
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