The Canadian dollar rose a bit against its US counterpart on Monday and accelerated the rally on Tuesday as the US immigration ban hurt the greenback. The Canadian currency also rose versus the euro but fell against the safe haven currencies — the Swiss franc and the Japanese yen.
The decision of US President Donald Trump to halt immigration from seven countries with Muslim majority and to stop accepting refugees caused a huge amount of confusion and turmoil on markets, leading to a decline of the US dollar. That, in turn, allowed the loonie to gain, ignoring the drop of crude oil prices. Such behavior is highly unusual for the loonie as the Canadian currency usually tracks moves of crude closely and reacts negatively to risk aversion on markets.
The performance of the Canadian dollar against the safe currencies (disregarding the US dollar) was much closer to norm. The loonie fell against the very strong yen, while versus the Swissie the Canadian currency advanced intraday but lost its gains by the session’s close.
USD/CAD fell from 1.3117 to 1.3104 as of 00:38 GMT today. EUR/CAD slid from 1.4068 to 1.4024 on Monday and traded near that level on Tuesday. CAD/JPY also stayed near the Monday’s close after declining from 87.36 to 86.75.
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