The Canadian dollar sank during Tuesday’s trading but bounced to trade basically flat against its major peers. The moves of the currency followed the moves of crude oil prices after the Iranian nuclear deal was announced.
As was expected, moves of the Canadian currency closely tracked the movement of oil prices. What was unexpected was the exact direction of that movement. The announcement of the accord between Iran and the international community regarding the Iranian nuclear program should have been negative for crude. Sure enough, prices for the commodity sank immediately after the news, dragging the loonie down with them. Yet oil bounced later, demonstrating a strong rally and leading to the recovery of the Canadian dollar.
Now, traders wait for the decision of Canada’s central bank that will be announced tomorrow. No changes for the monetary policy are expected, but the tone of the bank’s statement may have a big impact on the currency.
USD/CAD traded at 1.2734 as of 22:01 GMT today after rallying from 1.2739 to 1.2804 intraday. EUR/CAD retreated to 1.4016 following the rally from 1.4013 to 1.4129. CAD/JPY opened at 96.85 and fell to 96.33 before bouncing back to the opening level.
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