CAD Gains vs. USD & JPY, Falls vs. EUR
The Canadian dollar climbed against the US dollar and the Japanese yen after European Central Bank President Mario Draghi promised that the central bank will support the euro. As one could expect, the euro outperformed the Canadian currency after that promise.
To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate.
Stocks and commodities reacted favorably to Draghi’s comments. September futures for delivery of crude oil gained as much as 1.7 percent to $90.47 per barrel on NYMEX today. The Standard & Poor’s 500 Index also advanced 1.7 percent. The Canadian dollar is considered to be tied to economic growth, therefore it is correlated to stock and commodity markets.
USD/CAD dropped from 1.0153 to 1.0099 and CAD/JPY advanced from 76.93 to 77.44 as of 23:14 GMT today. Meanwhile, EUR/CAD rose from 1.2334 to 1.2400.
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Earlier News About the Canadian Dollar:
- Poor Canadian Retail Sales Add to Pressure on Loonie (2012-07-24)
- Europe Remains Source of Fear, CAD Still Under Pressure (2012-07-23)
- China's GDP Spurs Speculation About Stimulus, EUR/CAD at Record Low (2012-07-14)
- Canadian Dollar Reaches Record High vs. Euro (2012-07-13)
- Canadian Dollar Drops on Falling Prices for Crude & Corporate Earnings (2012-07-10)