The CAD firmed against the USD early Wednesday, as better-than-expected global economic data and a positive Portuguese bond auction helped to boost optimism over a global recovery and encouraged investors to move out of safe-haven assets. The USD was trading at C$0.9984 Wednesday morning, from C$1.0026 late Tuesday. The CAD is highly correlated to global equity markets–typically moving higher when stock markets rally, as investors feel more comfortable moving away from safer havens, like the USD and government bonds. But with Canada’s close link to the U.S., it tends to underperform other riskier currencies, like the AUD. On Wednesday, the CAD hit its lowest level against its Australian counterpart since May 1997. The Australian dollar moved higher after better-than-expected economic data from China, which has relied on Australian commodities to feed its growth. The AUD was trading recently at C$1.0683, off its session high of C$1.0695.
EasyForexNews Research Team