Canadian Dollar Weakens on Falling Crude Prices, Disappointing Exports

The Canadian dollar is weakening against multiple currency rivals midweek as energy prices are hitting the loonie. President Donald Trump confirmed that Iran is “standing down” in the intense Middle East conflict, sending futures plunging. The loonie was also impacted by disappointing export data. Despite being one of the top-performing G20 currencies, the Canadian dollar has had a rough start to 2020.

Speaking at the White House on Wednesday, President Trump addressed the nation regarding the situation with Tehran. The president announced that the regime is “standing down” after the US killed Qassem Soleimani and Iran responded by bombing US military bases in Iraq. Trump noted that he will “immediately impose additional punishing economic sanctions on the Iranian regime.”
Following the live television statement, energy prices crashed. February West Texas Intermediate (WTI) crude oil futures fell $3.07, or 4.9%, to $59.63 per barrel at 17:46 GMT on Wednesday on the New York Mercantile Exchange. March Brent crude futures shed $2.90, or 4.25%, to $65.37 a barrel on London’s ICE Futures exchange.
Oil prices had surged as much as 6% in the last week, but now they are down nearly 3% this year.
On the data front, the November producer price index (PPI) rose 0.1% and raw material prices climbed 1.5% in November.
According to Statistics Canada, the trade deficit narrowed to $1.09 billion in November, up from -$1.61 billion in the previous month. Exports tumbled 1.4% to $48.7 billion, driven by a 7.4% drop in crude shipments. Imports declined 2.4% to $49.78 billion, caused by decreases in purchases of aircraft and transportation engines, equipment, and parts and railcars for the transportation of oil
Next on the calendar is December’s housing starts and building permits on Thursday. But Friday will be key as the December jobs report will be published. The market is penciling in a gain of 25,000 jobs, which would be a significant improvement from the 75,000 jobs lost in the previous month.
The USD/CAD currency pair rose 0.21% to 1.3032, from an opening of 1.3006. The EUR/CAD declined 0.17% to 1.4479, from an opening of 1.4502.

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Original from: www.earnforex.com