Canadian dollar springs up from 13-year lows
The Canadian dollar was trading near 13-year lows versus the US dollar in the previous session as the benchmark interest rate remained unchanged. This happened even as speculations indicated a rate cut in the face of falling crude prices. Since Canada is a major exporter, a fall in crude prices would have a negative impact on the economy.
Manufacturing sales rose in November
Manufacturing sales rose by 1% in November on a monthly basis across Canada, exceeding expectations of a 0.5% growth and a contraction in the previous month of 1.3%. On the other hand, wholesale sales on a monthly note rose by 1.8% in November, going past expectations of a lower growth of 0.5% and a 0.5% fall in October.
A fall in crude oil prices
Crude prices continued their fall on Wednesday, causing short positions on the Canadian dollar on January 20, 2016. The sell-off in crude prices began after the International Energy Agency warned against a further shortfall in crude prices. Crude oil is Canada’s primary export and the slump in oil prices has recently weighed negatively on the Canadian dollar. Crude oil prices have fallen by more than 20% since the beginning of the year.
Impact on the market
The Guggenheim CurrencyShares Canadian Dollar ETF (FXC) rose by 0.45% on January 20, 2016, following the Bank of Canada’s monetary policy.
Canadian energy American depositary receipts that traded in US markets were doing so on a mixed note. Baytex Energy (BTE) and Canadian Natural Resources (CNQ) were trading higher by 1.5% and 0.13%, respectively. On the other hand, Crescent Point Energy (CPG) and Enbridge (ENB) fell by 7.6% and 6.1%, respectively.