The Canadian dollar continued its race down, falling to the lowest level this year against its US peer and to the four-month low versus the Japanese yen, as the situation in Europe does not shows signs of improvement, eating away appeal of commodity currencies.
The situation in the eurozone worsens with each passing week as European leaders show lack of ability to deal with problems. There are talks that the International Monetary Fund considers measures to rescue Spain. As a result of growing risk aversion, commodities decline and commodity currencies along with them. The most important export of Canada, crude oil, fell to the lowest level since October.
Canada’s current account deficit on a seasonally adjusted basis expanded by $0.6 billion to $10.3 billion in the first quarter of this year. Canada’s biggest trading partner, the United States, has its share of problems. Unemployment claims unexpectedly rose from 373,000 to 383,000 last week. Chicago Purchasing Managers’ Index fell from 56.2 in April to 52.7 in May.
USD/CAD rose from 1.0302 to 1.0327 as of 20:56 GMT today after reaching 1.0364 intraday, the highest price since December 20. CAD/JPY slipped from 76.69 to 75.80, while its daily minimum was at 75.43 — the lowest since January 18. EUR/CAD ticked up from 1.2741 to 1.2766.
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