The Canadian dollar was stable on Wednesday, reflecting the overall trend in most financial markets as investors eagerly await Thursday’s crucial US CPI inflation data. After experiencing a surge towards the end of 2023, the Canadian dollar has since lost 1.25 percent against the US Dollar, primarily due to the broad strength of the US dollar.
On Tuesday, Canada’s November International Merchandise Trade Balance reported lower figures month-over-month, and Canada’s Building Permits also fell more than expected in November. Combined with crumbling oil prices, these factors have clipped the loonie’s wings.
Global equity markets stabilized Thursday morning after a rocky first two trading days of 2024. The shaky start was a result of a sell-off in technology stocks, following the waning hype over artificial intelligence and the realization of AI’s limited ability to deliver profits quickly. This, along with the release of the latest Fed meeting minutes showing a strong bias towards keeping rates restrictive for the foreseeable future, moved investors into a risk-averse posture. This has pushed the US dollar higher broadly against most currencies.
The US Dollar has started 2024 with a bang, hitting a weekly high against the Canadian Dollar on Tuesday morning. The US Dollar was experiencing broad gains, with the Dollar Index – a measure of the U.S. currency against six major currencies – up by 0.67% at 102.05, marking the biggest daily percentage gain since October.
