Canadian dollar eases as safe-haven currencies outperform

Wed May 17, 2017 5:21pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Solarina Ho

TORONTO (Reuters) - The Canadian dollar eased slightly against the U.S. dollar on Wednesday, as political uncertainty in Washington supported safe-haven currencies and domestic manufacturing sales rose in line with economists' expectations.

At 4:00 p.m. ET (2000 GMT), the Canadian dollar CAD=D4 was trading at C$1.3616 to the greenback, or 73.44 U.S. cents, down 0.1 percent, according to Reuters data.

"It's a conundrum today...because the U.S. dollar is obviously on the backfoot," said Amo Sahota, director at Klarity FX in San Francisco, adding that other currency drivers including oil prices and interest rate spreads between the U.S. and Canada did not reflect the softer Canadian dollar.

"You would expect to see some more Canadian dollar strength coming through...The focus has been on the majors and what you'd call your classic risk trades."

The yen and Swiss franc outperformed as the greenback .DXY fell against a basket of major currencies. The euro and sterling also outperformed the Canadian dollar.

Talk that U.S. President Donald Trump could face the threat of impeachment weighed on risk-sensitive assets, including richly valued stocks.

The currency traded in a range of C$1.3573 and C$1.3641 during the North American session.

Sahota said there was still room for the USD/CAD to unwind and move back close to C$1.35 area. Earlier this month, the Canadian dollar touched a 14-month low at C$1.3793 on an uncertain trade outlook with the United States and troubles at an alternative mortgage lender.   Continued...

 
A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch