Most currencies rallied against the US dollar after the Federal Reserve’s policy announcement, but the Canadian dollar did not join the parade. The explanation for this is simple: prices for crude oil fell and dragged the Canadian currency along with them.
Market participants remain cautious ahead of the referendum in the United Kingdom, preferring to avoid unnecessary risk. Such considerations make them less willing to buy assets linked to economic growth, including crude oil. The loonie simply followed the movement of crude as it often does.
Economic data from Canada itself was good. Manufacturing sales rose 1% in April, exceeding analysts’ projections. Yet the positive report was not nearly enough to prevent the currency from falling.
USD/CAD rose from 1.2871 to 1.2910 as of 23:01 GMT today. EUR/CAD surged from 1.4421 to 1.4539. CAD/JPY declined from 82.42 to 81.97.
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