Loonie Continues to Fall in Tandem with Crude Oil

The Canadian dollar slumped on Tuesday as prices for crude oil continued to struggle. Economic data from Canada’s neighbor, the United States, also was not helping the currency much.

Crude oil continues to struggle due to the threat of oversupply. The Canadian currency, being tied to the performance of the commodity, suffered as a result.

US macroeconomic data also had its negative impact on the loonie as most of Tuesday’s reports were lackluster. Poor data from the USA means that the Federal Reserve will likely postpone the start of monetary tightening, and thus is usually helping commodity currencies. Yet the Canadian dollar is a bit different in that regard as the United States are the biggest trading partner of Canada, and its bad economic performance does not really help Canada’s economy and currency.

USD/CAD rallied from 1.3161 to 1.3264 yesterday and traded at 1.3272 as of 00:59 GMT today. EUR/CAD was at about 1.4639 following the rally from 1.4544 to 1.4650. CAD/JPY traded near 90.64, the lowest since October 2, during the Wednesday’s trading session after sinking 1.3 percent from 91.92 to 90.72 during the Tuesday’s session.

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