Loonie Falls Against Dollar on Weak Oil Prices, Gains on BoC Rate Decision

The Canadian dollar remained largely weaker than the US dollar, driven by the weak crude oil prices that weighed on the commodity-linked loonie. The USD/CAD currency pair’s gains went against the losses incurred by the greenback as US Treasury yields fell amid the expected increase in US bonds’ supply.
The USD/CAD currency pair rallied to a high of 1.2683 in the early European market before falling to a low of 1.2613 during the American session and was near these lows at the time of writing.
The currency pair’s initial rally was driven by the weak crude oil prices as tracked by the West Texas Intermediate, which inched higher today. The loonie’s weakness persisted despite the elevated investor risk appetite that lifted other risky currencies. The release of the Bank of Canada‘s interest rate decision hurt the pair, which fell as the loonie rallied. The BoC’s top policymakers left interest rates at 0.25% as expected and did not hint at taking measures to stall rising Canadian yields.
The US dollar’s weakness, as tracked by the US Dollar Index, which hit a low of 91.79, finally drove the pair lower. The pair later fell after the US consumer price index report for February released by the Bureau of Labor Statistics missed expectations. The passage of the US $1.9 trillion stimulus bill also weighed on the dollar as yields fell.
The currency pair’s future performance is likely to be affected by crude oil prices and US dollar dynamics.
The USD/CAD currency pair was trading at 1.2625 at 20:38 GMT, having fallen from a high of 1.2683. The CAD/JPY currency pair was trading at 85.87 after falling from a high of 86.04.
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Original from: www.earnforex.com