The Canadian dollar fell to its lowest level in three weeks against its U.S. counterpart, as the greenback broadly strengthened due to Japan’s intervention in the currency markets early in Asian trading in order to curb the yen’s rise. This made USD/JPY rise.
USDCAD rose its highest level since July 12, peaking at 0.9758 by 15:00 GMT, jumping from the New York session low of 0.9684.
U.S. dollar strength is mainly due to a spill-over effect from a mass sell-off of the yen against the U.S. dollar, boosting the USD across the board and catching USD/CAD in the cross-fire.
By tomorrow the focus will turn to the crucial U.S. non-farm payroll data, the most important economic data released in the U.S. that usually causes drastic movements in the U.S. currency.
Recently, a rise in risk aversion has taken a toll on commodities and commodity-linked currencies like the Canadian dollar. Canada is a major exporter of crude oil and is greatly affected by falling oil prices. Today, crude oil fell to as low as USD 89.62, the lowest level since June 27.
Oil prices have been falling due to growing concerns on the global economic recovery as well as the U.S recovery. The U.S. is a major consumer of crude oil and weaker economic growth means a fall in demand for crude.