The Canadian dollar demonstrated a strong rally today, joining other currencies that have gained on the US dollar. There were several reasons for the rise: the Federal Reserve policy announcement, rising crude oil prices and solid manufacturing sales in Canada.
The loonie and other currencies (especially commodity-related ones) demonstrated strong gains against the greenback after the Fed scaled down its outlook for the pace of monetary tightening. It helped the Canadian dollar not only by weakening the US currencies but also by boosting prices for oil.
As for domestic data, Canada’s manufacturing sales grew 2.3% in January, reaching the record high. The increase was far bigger than the predicted 0.4%.
Overall, fundamentals were very beneficial to the Canadian dollar, allowing it to reach the highest level since November against the US currency.
USD/CAD sank 1.7% from 1.3350 to 1.3129 as of 22:53 GMT today. EUR/CAD declined from 1.4823 to 1.4723. CAD/JPY gained 1.1% from 84.75 to 85.88.
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