Canadian Dollar Falls as Crude Oil Price Declines

Canadian Dollar

The loonie posted the sharpest fall in 4 days against all major currencies, interrupting a bullish trend as the price of crude oil stopped its rally, damping demand for the Canadian currency high-yielding profile.

The Canadian dollar had a day of negative performance after Bank of Canada Governor Mark Carney stated that a strong loonie may affect the Canadian economic, as exporters would lose competitiveness having less significant profit margins. The Bank of Canada may take measures to stop the national currency rally which has started since the demand for commodities improved in April, Carney also eased the expectations for a quick world economic recovery, in an attempt to control investors’ bullish sentiment towards the Canadian dollar. The loonie, among the main six traded currencies, posted the highest gains related to the commodities and stocks rally that were triggered by signs of an economic recovery coming firstly in Asia, followed by emergent markets and Europe. It is natural that the Canadian dollar is losing strength, according to economists, the rally it witnessed was too sharp, and after Carney’s declarations together with a correction movement in the oil price, the loonie was totally unable to keep its bullish pattern.

Even thought analysts are uncertain about Canada’s dollar future, it is well agreed that some factors will stop or at least ease its current strength. USD/CAD closed the session at 1.1181 from Thursday’s rate of 1.1015, ending this week with a virtually neutral performance. If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.