The Canadian dollar rallied earlier during the current trading session, hitting the two-year high versus the euro, with the help of favorable economic data from Canada. Yet the loonie was unable to keep gains and is now trading far below the opening level against other majors.
Today’s macroeconomic releases from Canada were extremely good. Consumer inflation accelerated in March while analysts were anticipating slowdown. Retail sales rose 1.7 percent in February, the rate of growth being more than three times bigger than the forecast 0.5 percent.
Yet even with all the support the Canadian currency did not manage to maintain its upward momentum. Why is that? The most probable reason for the drop is the decline of crude oil prices following yesterday’s rally that propelled the loonie higher.
USD/CAD rose from 1.2182 to 1.2224 as of 19:28 GMT today after reaching the daily low of 1.2087 — the lowest level since January 21. EUR/CAD rallied from 1.3109 to 1.3216, bouncing from the low of 1.3020 — the weakest rate since April 2013. CAD/JPY declined from 97.66 to 97.11 following the rise to 98.41, the highest since January 20.
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