Canadian Dollar Loses Big Against the US Dollar
The Canadian dollar had been losing against the US dollar since last week and there is no hope for redemption anytime soon. On Wednesday, the CAD hit a 64-day low, reaching 1.34952 against the US dollar. This is the lowest value of CAD, since the beginning of this year.
The year has not been very good for the Canadian dollar, as the country battles economic slack. The rally of the US dollar is not helping Canada either. Recently, the Bank of Canada admitted to the country’s economic slack. There were gains in employment, but this was not supported by the wages. As a result, the Bank of Canada kept the interest rates constant at 0.5%. This obviously decreased the interest of the investors.
The Canadian GDP figures for the final quarter of 2016 were disappointing. Fall of imports, a decline in business investments and inventories show the poor state of the Canadian economy. Apart from the slowing down of the local economy, the US dollar strengthening against major world currencies has weakened the Canadian dollar further.
The final blow to the CAD came from crashing oil prices. The crude oil futures reduced by 3.8%, as the crude oil inventories in the USA had increased to 8.2 billion barrels. The increase in oil production caused the oil price to slump down to $51 per barrel, from $52.80. The oil price has hit an 82-day low, touching $50.14.
CAD was already struggling, losing 0.4% in the forex market and the reduction in oil prices has pushed it down further against the greenback.
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