The Canadian dollar experienced weakness during the past week. While the currency managed to rally against the Japanese yen, the loonie demonstrated losses versus the US dollar and the euro.
The currency started trading on a weak note, mostly due to the drop of prices for crude oil. Oil prices bounced by the end of the trading week providing some support to the Canadian dollar, but the news from Canada itself did not allow the nation’s currency to regain much strength. Canada’s gross domestic product presented a negative surprise, falling in March and in the first quarter of this year. Even the policy statement from the Bank of Canada, while being fairly optimistic, had some detrimental effect on the loonie, mentioning strength of the currency as an important detail for policy consideration. Analysts speculated that the phrase hints at the desire of the central bank to see the currency weaker.
Outside of Canada, the most important event was the release of the second estimate for US GDP. It showed that the US economy contracted as well, but it was not a big surprise to market participants, limiting its negative impact on the US currency.
USD/CAD went up from 1.2285 to 1.2437, reaching the weekly high of 1.2538. EUR/CAD rallied from 1.3518 to 1.3656. CAD/JPY gained from 98.84 to 99.77 over the trading week.
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