The Loonie weakens despite the bounce of crude oil.

Daily Currency Update

CAD - Canadian DollarThe Loonie is trading mixed this morning, losing 0.19 percent versus the U.S. dollar, but gaining 0.76, 0.20 and 0.05 percent versus the Aussie dollar, the Pound and the Euro respectively, because of the strength of crude oil. The USD/CAD pair traded close to 1.2950 in the European session, when crude oil bounced back to over 63 dollars a barrel, but, at this moment, the USD/CAD is trading at 1.3000. The main reason for the Loonie’s depreciation over the last few hours is the risk-off mode in the capital markets. Iran announced that it was assessing 13 scenarios for retaliation against the U.S. Ali Shamkhani, the head of Iran's national security council, said: "Even if the weakest of these scenarios gain a consensus, its implementation can be a historic nightmare for the Americans." Iranian officials have previously said that U.S. forces in the region will be targets, and the Iranian parliament on Tuesday designated the Pentagon and affiliated companies as terrorists. According to Bloomberg, the U.S. issued a warning to the shipping industry in the Middle East over the possibility of Iranian action against U.S. maritime interests. According to Statistics Canada, Canada's merchandise exports decreased 1.4 percent in November to $48.7 billion, while imports were down 2.4 percent to $49.8 billion. As a result, Canada's merchandise trade deficit with the world narrowed from $1.6 billion in October to $1.1 billion in November. According to Bloomberg, a multi-day rail strike disrupted transportation of key goods, raising concerns about the strength of the domestic economy.