The USD/CAD pair continued its consolidation in yesterday’s trading session, touching an intraday high of 1.3298 after crude oil WTI fell almost 2 percent in a soft “risk-off” environment in North America. This morning, the USD/CAD pair is falling 0.31 percent (stronger Loonie) amid a stronger US dollar index, which started its quiet reversal on January 10th, but it might not last.
The Canadian Dollar is a commodity-linked currency and it is linked to fluctuations in global risk appetite, which in turn is impacted by China’s economic situation; however, it is less impacted than currencies such as the Australian dollar.
Canadian home sales activity softened in November, where national home sales fell 2.3. On the release side, the weakening continued with today’s data; the Canadian home sales activity fell again; the actual number came in at -2.5 percent versus -1.0 percent from November to December. However, the Loonie is shrugging about this miss, and it continues its appreciation.