European Debt Troubles Drive CAD Higher vs. EUR, Lower vs. USD

The Canadian dollar fell against its US counterpart as the European debt troubles led to the risk aversion sentiment among the investors and after the report showed that Canada’s economic growth unexpectedly stalled.

The Canadian gross domestic product declined 0.1 percent in September. It grew 0.3 percent in the month before and was expected to increase 0.1 percent in September. Canada’s current account deficit widened by C$4.6 billion to C$17.5 billion in the third quarter because of growing imports and declining exports. The previous value was C$13.0 billion and the deficit was predicted to increase just to C$14.9 billion

The European debt crisis continues to weaken growth-related currencies, but in the same time allowing them to appreciate against the euro. China also has negative impact on the commodity currencies as it’s going to raise the lending rates and to take other measures to cool its economy.

USD/CAD traded near 1.0261 as of 02:11 GMT, the closing level of the yesterday’s session, after it opened yesterday at 1.0179. EUR/CAD dropped from 1.3361 to 1.3322.

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