The Canadian dollar fell against major currencies this week despite domestic fundamentals that were supportive for the currency.
Mark Carney conducted led his last meeting as Bank of Canada Governor, leaving the monetary policy unchanged and hinting that an interest rate cut is possible in the future. Such outlook boosted the loonie and fundamentals, including narrowing current account deficit, helped the currency too. Yet the Canadian dollar ended the week with losses as other majors had their own reasons to rally.
The US dollar profited from talks about an end to Federals Reserve’s quantitative easing. The resulting nervousness of traders also benefited the yen. At the same time, the euro was rising on positive European data.
Several central banks will hold policy meetings next week: the European Central Bank, the Bank of England and the Reserve Bank of Australia. No changes to policies are expected.
USD/CAD advanced from 1.0304 to 1.0366 this week and its weekly high of 1.0419 was highest since June 5. EUR/CAD went up from 1.3329 to 1.3471 — the strongest weekly close since January. CAD/JPY edged down from 97.98 to 96.86 after rallying to 98.99.
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Positive Fundamentals Did Not Help CAD This Week
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