The Canadian Dollar was on the downside today, losing all gains made over the past two days.
The fall in commodities dragged down the Loonie, which is strongly correlated to commodities. The comeback of the greenback and crude oil inventories rising higher than expected for the past week, helped the drop in oil prices. Other commodities, notably silver, as well as gold, took a tumble, reminding nervous investors of last week’s sell off in commodities.
Soft Chinese CPI data from Wednesday suggested that one of the largest global economies is slowing down.
The Canadian dollar ended the North American session at C$0.9609 to the U.S. dollar, or $1.0406, down from Tuesday’s North American close of C$0.9575 to the U.S. dollar, or $1.0443. USDCAD hit as high as 0.9637 before the close of the US session. It is currently trading at 0.9601 in the Asian session on Thursday making a slight correction.
The US session pattern was a complete reversal of what occurred in the prior European session (on Wednesday) , where USDCAD lost as much as 48 pips from the open to the lowest level.
On Wednesday Canada’s trade surplus report showed exports grew in March, making the surplus higher than the past two months of decline.
“You’re dealing with a potential risk-off tone right now unfortunately and the Canadian dollar gets caught in the crossfire, as do commodities and equities,” said David Tulk, chief Canada macro strategist at TD Securities.
“We’re one step forward, two steps back,” Tulk added.