The Canadian dollar advanced versus the US dollar and the euro after crude oil gained. The currency fell against the Japanese yen on prospect of increasing tightening in China.
The good economic reports from the US today allowed commodities, including crude oil, to rally today. Contract for crude oil delivery gained as much as 1.6 percent to $109.66 per barrel in New York, following the decline by 0.8 percent. Raw materials, including crude, make up about half of Canadaâs export revenue.
The inflation surge and the economy is overheated in China. China’s economy grew 9.7 percent in the first quarter from a year ago and the inflation jumped 5.4 percent in March, causing speculation that the country will introduce more austerity measures. That would be bad for economic growth, commodities and commodity currencies, decreasing appeal of the loonie.
USD/CAD closed at 0.9590 today after it jumped from 0.9610 to the intraday high of 0.9648. EUR/CAD dropped from 1.3920 to 1.3837, while CAD/JPY fell from 86.84 to 86.59.
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