The Canadian dollar fell against such currencies as the euro and the Japanese yen today due to the sharp drop of crude oil prices. The loonie managed to gain on the US dollar, which was rather soft on Monday.
Crude oil dropped amid concerns that the increase of US oil production will add to oversupply on the market, damping the impact of the oil production cut deal announced by the Organization of Petroleum Exporting Countries. Oil prices dropped almost 3% during the Monday’s session despite the news that Russia decreased its oil output. Crude is the major source of Canada’s export revenue, therefore it has a big impact on the nation’s economy and currency.
The Canadian currency managed to avoid losses versus the greenback, which traders mostly lower against its peers. Over the longer term, though, the US currency is likely to outperform the loonie due to prospects for monetary tightening from the Federal Reserve and potential negative impact of Donald Trump’s presidency on the trading relationships between the United States and Canada.
USD/CAD went down from 1.3244 to 1.3224 as of 18:58 GMT today. EUR/CAD edged up from 1.3943 to 1.3966. CAD/JPY declined from 88.30 to 87.92.
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