Canadian Dollar Takes Beating, US Economy is Blamed

The Canadian dollar was weaker today against most major currencies as the poor performance of the US economy had its negative impact on attractiveness of Canada’s currency to investors.

The US economy is looking really bad nowadays, especially considering how good it looked not so long ago. On of the biggest problems in the economy is the high level of unemployment. The non-farm payrolls are expected to show a solid growth by 194,000, but it’s lower than the previous reading of 244,000.

The state of the US economy is important for Canada and its currency as the US is the biggest trading partner of the nation. Three quarters of Canada’s exports are shipped to the US.

Lee Hardman, a foreign-exchange strategist in London at Bank of Tokyo-Mitsubishi UFJ Ltd., confirmed the role of the US economy in the performance of the Canadian dollar:

The main driver of the Canadian dollar at this point in time is the slowdown in the U.S. economy, which is negatively impacting the currency.

The Canadian currency rose a little against the US dollar and the Japanese yen yesterday, but pared the gains today. The loonie also extended losses versus the euro.

USD/CAD rose today to 0.9764 from 0.9757 as of 2:36 GMT after falling to 0.9743. EUR/CAD went up to 1.4145 from 1.4138 and CAD/JPY dropped to 82.65 from 82.84.

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