The Canadian dollar jumped against its US counterpart yesterday as temporary measures to avert default in the United States were taken. At the same time, the loonie slumped against other currencies, including the euro and, surprisingly, the Japanese yen. Today, the Canadian currency is trying to reverse yesterday’s moves.
The US Congress passed the bill that extends the Treasury’s borrowing authority until February 7 and funding of the government until January 15. The Republicans surrendered for now, but pledged to continue their fight against the so-called Obamacare. Senate Minority Leader Mitch McConnell said:
Republicans remain determined to repeal this terrible law… But for today — for today — the relief we hope for is to reopen the government, avoid default and protect the historic cuts we achieved under the Budget Control Act.
The inflation data will be released today from Canada. It is expected to show weak but stable price growth.
USD/CAD tumbled from 1.0326 to 1.0288 yesterday and traded at 1.0296 as of 2:13 GMT today. EUR/CAD was near 1.4066 after jumping from 1.3975 to 1.4069. CAD/JPY traded at about 95.21 following the drop from 95.60 to 95.11.
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