The Canadian dollar declined against the U.S. dollar for the second week in a row as the oil and commodities prices continued to drop on the worsening global economy outlook.
The Bank of Canada Commodity Price Index dropped to 181.63 this week — its lowest level since 2005, while oil prices dropped below $50. Commodity exports are very important for the Canadian economy as they constitute a large part of the countrys GDP and attract the foreign capital to the financial system.
From the fundamental analysis point of view the Canadian dollar has only one way — down, as it gets no support neither from the commodities nor from the positive interest rates difference.
But from the technical point of view, the USD/CAD currency pair iscurrently heading to form a double top pattern after declining on Friday this week. If the price corrects to about C$1.1500 per dollar the further decline may follow.
USD/CAD gained 2.3 percent this week — from 1.2381 to 1.2666. It declined down from 1.2971 to 1.2666 or 2.4 percent on Friday alone.
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