The Canadian dollar rose yesterday as economy expanded, following a period of contraction. Yet the currency retreated today amid fears concerning a potential US government shutdown.
Canadian gross domestic product grew 0.6 percent in July, matching traders’ expectations. The economy shrank 0.5 percent in June. The report was definitely positive for the loonie, so it is not a surprise that the currency has rallied.
Yet the current drop of the Canadian currency was not unexpected either as the standoff in the US government made traders unwilling to buy riskier currencies. It was surprising somewhat that the loonie managed to hold ground against the Japanese yen, but currently it struggles to keep its gains.
USD/CAD rose from 1.0306 to 1.0330 and EUR/CAD advanced from 1.3940 to 1.3969 as of 3:06 GMT today. CAD/JPY retreated from 95.25 to 95.16 after rallying to 95.59.
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