USD/CAD Extends Rally on US Court Decision and Weak Oil Prices

The  USD/CAD currency pair today extended yesterday’s gains as  the  Canadian dollar dropped against the  greenback amid the ongoing as  the  global crude oil selloff. The  pair’s rally was further accelerated by  news reports that a  US Federal Court had stopped the  construction of  the  Keystone XL pipeline that connects Canadian oilfields to  Texas oil pipelines.
The  USD/CAD currency pair today rallied from an  opening low of  1.3139 to  a  high of  1.3198 and  was near these highs at  the  time of  writing.
The  pair’s rally started yesterday after the  FOMC rate decision where the  US dollar rallied against most of  its peers. The  weak global crude oil prices also contributed to  the  loonie’s decline even as  a  barrel of  West Texas Intermediate crude oil dropped to  new 7-month lows below $60. Media reports that Canada was pushing back against attempts by  the  US to  change the  terms of  their September trade deal also weighed on  the  loonie. The  fact that the  global supply of  crude oil is not declining despite the  US sanctions on  Iran also weighed heavily on  the  Canadian dollar.
The  greenback’s rally as  tracked by  the  US Dollar Index, which hit a  high of  96.92 today, also contributed to  the  loonie’s decline. The  FOMC’s confidence in  the  US economic outlook also boosted the  pair.
The  pair’s short-term performance is likely to  be affected by  global oil prices, the  release of  US PPI data and  preliminary UoM consumer sentiment data later today.
The  USD/CAD currency pair was trading at  1.3188 as  at  12:56 GMT having rallied from a  low of  1.3139. The  CAD/JPY currency pair was trading at  86.31 having dropped from a  high of  86.72.

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