Loonie halts risk aversion-driven drop
Friday 12 May, 2023
Daily Currency UpdateThe Canadian dollar is steadying itself in early trading this morning after losing close to a cent against the USD yesterday. A drop in oil prices along with shaky markets led to a risk-off strategy that proved to be a hindrance to the risk-friendly Canadian dollar. Helping to pause the Loonie’s recent slide is the stabilizing of oil prices which fell off yesterday due to concern over China’s economic output.
Key MoversThe USD dollar index (DXY) made close to 1% in gains yesterday as market participants look towards a face-off in Congress over the US Government debt ceiling. Recent inflation data, including yesterday’s lower-than-expected Producer Price Index (PPI), are reinforcing a probable pause in rate hikes from the Federal Reserve in June. The dark cloud hanging over the economy remains to be the approaching deadline in the US Congress to increase its acceptable debt level.
The Euro was down yesterday against the greenback as the USD gained across the board. The main driver for this pair’s dip was an overarching risk aversion strategy as investors searched for more defensive assets.
The GBP joined most major currencies in losing ground through trading yesterday. This morning, the GBP is on a rebound after data showed that the British economy grew in line with expectations in the first quarter of 2023. The average growth in the last 2 months was 0.1%, on par with analysts’ expectations.
- EUR/CAD: 1.4678 - 1.4747 ▼
- GBP/CAD: 1.6858 - 1.6915 ▼
- AUD/CAD: 0.9011 - 0.9045 ▼
- USD/CAD: 1.3450 - 1.3520 ▲