Market Overview

Canadian Dollar (FXC) Rallies After Trade Data

The Canadian Dollar (CAD) closed the week on a high note after the trade balance for December took everybody by surprise by quite a margin. The Canadian economy recorded a 3 billion dollar trade surplus for that month, a much higher positive number than the 0.3 billion dollar deficit expected by most of the analysts.

The positive number, combined with other recent positive economic releases from Canada, has caused many investors to start pricing in a possible rate hike by the Canadian monetary authorities sooner than previously thought. Most of the economists and investors have been expecting a monetary tightening by the Bank of Canada some time in the second half of this year, but the recent data suggests that it might come earlier than that.

After the number was released, the Canadian Dollar soared against its US counterpart (USD), while moving significantly higher against the Euro (EUR) and the Japanese Yen (JPY) as well.

The USD/CAD tumbled from 0.9985 all the way to 0.9860, thus erasing all the gains the pair had or this week. The EUR/CAD currency pair, meanwhile, fell from 1.3490s to 1.3360, and the CAD/JPY jumped from 83.80 to 84.50.

Posted-In: Forex Global Economics

 

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