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Canadian Dollar Drops Against US Peer, Recovers on Poloz’s Speech

May 14, 2020 at 15:55 by Simon Mugo

Loonies

The Canadian dollar today lost ground against its US peer as the greenback posted gains boosted by President Donald Trump’s comments about a strong dollar. The USD/CAD rallied higher earlier today before giving up all its gains later in the session as the loonie recovered on hawkish comments from the Bank of Canada Governor.

The USD/CAD currency pair today rallied to a high of 1.4140 in the early American session before falling to trade near its daily low of 1.4068, which was set in the European session.

The currency pair traded sideways earlier today as the bulls and bears fought for control before rallying higher in the mid-European session. The pair’s rally coincided with the greenback’s gains as tracked by the US Dollar Index, which hit a high of 100.56 today. The loonie’s weakness was also linked to the weak global crude oil prices as tracked by the West Texas Intermediate, which has been trading in a tight range. Jerome Powell’s dismissal of negative interest rate in the US also boosted the greenback. The release of weak Canadian manufacturing sales data for March by Statistics Canada contributed to the pair’s rally.

However, the loonie recovered as Stephen Poloz, the Bank of Canada Governor gave a speech on the Canadian economy and future expectations. Poloz was confident that the BoC’s interventions, combined with fiscal policies, had laid a strong foundation for Canada’s recovery.

The pair’s future performance is likely to be affected by crude oil prices and US dollar dynamics.

The USD/CAD currency pair was trading at 1.4085 as at 15:54 GMT having fallen from a high of 1.4140. The CAD/JPY currency pair was trading at 76.06, having risen from a low of 75.58.

If you have any questions, comments, or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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