The Canadian dollar extended its drop today, touching the lowest level since March against the US dollar and falling 1 percent versus the Japanese yen. At the same time, the loonie gained on the euro, though it trimmed most of initial gains.
Domestic fundamentals were unfavorable to the Canadian currency as the nation’s trade balance deficit increased from C$3.0 billion in April to C$3.3 billion in May. It was a nasty surprise to those economists who had counted on a decrease to C$2.6 billion.
Overseas news was detrimental to the currency as well. The ongoing debt crisis in Greece and the crash of the Chinese stock market limited demand for riskier currencies linked to economic growth. Furthermore, the adverse fundamentals continued to drive prices for crude oil down, putting additional pressure on the Canadian dollar.
USD/CAD gained from 1.2649 to 1.2738 as of 18:01 GMT today, and its daily high of 1.2779 was the highest rate since March 31. EUR/CAD ticked down from 1.3985 to 1.3966, bouncing from the daily low of 1.3904. CAD/JPY dived from 96.86 to 96.05, touching the low of 95.58 intraday — the weakest level since April 15.
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