The Canadian dollar rose against the Japanese yen today as positive fundamentals may encourage policy makers to tighten monetary policy. At the same time, the currency weakened against the US dollar.
Signs of economic growth in Canada reinforce the case for the Bank of Canada to remove part of monetary accommodation. Good news from the United States, the biggest trading partner of Canada, added to the chances of stimulus reduction and the strength of the loonie. Traders should take into account that the BoC looks less hawkish with the new leadership.
Of course, the same positive data from the USA that helped the loonie also made the greenback stronger. It is not surprising that the US currency managed to outperform the Canadian one.
USD/CAD rose from 1.0274 to 1.0292 as of 8:15 GMT today. CAD/JPY advanced from 95.21 to 95.65 after falling to 94.95 earlier. EUR/CAD was little changed at 1.3661.
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