The Canadian dollar fell amid concerns that global economic growth may not be enough to support demand for commodities and commodity-related currencies. The loonie attempted to rally before the end of the session, but did not manage to rebound, though was able to trim the losses.
Traders were concerned as the data showed that China’s fixed-asset investment declined in December from the previous month. On top of that, US consumer sentiment unexpectedly worsened, adding to reasons for concern among investors. The poor reports from the major world economies hurt raw materials and currencies tied to their performance.
The loonie (as the Canadian currency is nicknamed for the image of the aquatic bird on the C$1 coin) fell, but trimmed its losses before closing. Some analysts speculated that traders were overreacting to any bad news in absence of really big events.
USD/CAD closed at 0.9916 after rising from 0.9852 to 0.9945 — the highest rate since December 31. EUR/CAD closed at 1.3209 after it opened at 1.3177 and touched 1.3243 — the highest since April 3. CAD/JPY dropped from 91.13 to 90.75, while its intraday low was at 90.25.
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