Canadian Dollar Resilient in Face of Negative Fundamentals

The Canadian dollar fell against its US counterpart on Friday but was surprisingly robust against its other major peers like the euro and the Japanese yen. The currency demonstrated resilience despite negative fundamentals.

Data released on Friday, showed that Canadian employment shrank in November much more than analysts had anticipated while the unemployment rate increased unexpectedly. Moreover, the trade balance deficit increased instead of falling as had been predicted by economists. And on top of all that, the Organization of Petroleum Exporting Countries refused to cut oil production, sending prices for crude lower.

Earlier this week, the report showed that Canada’s economy shrank in December unexpectedly. Virtually the only positive piece of news was the fact that the Bank of Canada refrained from easing its monetary policy.

Yet despite all the negative information, the Canadian currency showed fairly decent performance during the last trading session of the current week.

USD/CAD advanced from 1.3353 to 1.3376 on Friday. At the same time, EUR/CAD was down from 1.4603 to 1.4544 while CAD/JPY rose from 91.77 to 92.06.

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