Home » As Tensions in Ukraine Rise, the Canadian Dollar Lose Gains

As Tensions in Ukraine Rise, the Canadian Dollar Lose Gains

by Carl Steward
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USD/CAD, American dollars, European euro, Swiss franc, Canadian dollar, australian dollar billsAs Tensions in Ukraine Rise, the Canadian Dollar Lose Gains

The Canadian dollar fell against the US dollar on Friday. The prospect of a Russian attack on Ukraine triggered a selloff in risky assets. Hence, the currency revised some of this week’s progress.

After Washington said Russia had massed enough troops near Ukraine to launch a significant invasion, Wall Street fell, and safe-haven assets such as US Treasuries and the US dollar rose. After trading in a range of 1.2670 to 1.2754, the Canadian dollar traded 0.2 percent lower at 1.2742 to the greenback or 78.78 US cents. The loonie was up 0.2 percent for the week.

Nonetheless, the Canadian dollar fell much less than other currencies on Friday, as escalating Ukraine tensions exacerbated concerns about a lack of supply in the market for oil, one of Canada’s major exports. Crude oil futures in the United States settled 3.6 percent higher at $93.10 per barrel.

Meanwhile, Canada’s Ontario province declared a state of emergency. It threatened protesters who had been blocking a key US trade corridor for four days with fines and jail time. The trade disruption may impact Canadian economic activity in the first quarter. However, according to analysts, it is unlikely to derail the Bank of Canada’s interest rate hike next month.

Government bond yields in Canada fell across the curve, mirroring the decline in US Treasuries. The 10-year note fell 7.6 basis points to 1.861.


On the other hand, the EUR/USD remained unchanged at 1.1349, well below last week’s high of 1.1495. At the same time, the riskier AUD/USD fell 0.2 percent to 0.7120, also well below last week’s levels.

Furthermore, the USD/RUB fell 0.8 percent to 76.5920, with the ruble paring losses after falling to a two-week low earlier. These geopolitical tensions are weighing on the Russian currency. Hence, the country’s central bank raised interest rates by 100 basis points for the third time in less than a year on Friday, providing additional support.

It has boosted so-called safe-haven currencies, with the USD/JPY falling 0.1 percent to 115.36, down from a five-week high of 116.34 last week. This volatile situation adds to the reasons to support the dollar, following hotter-than-expected US inflation data last week, which raised expectations.

The post As Tensions in Ukraine Rise, the Canadian Dollar Lose Gains appeared first on forexinsider24.com.

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