Canadian dollar benefits from surging oil prices

The Canadian dollar was able to regain the upward trend after the improvement in risk in global financial markets following positive US economic data that suggested the “soft landing” scenario and that the Federal Reserve’s approach to achieving it is still possible.

Oil futures concluded Thursday’s trading in an upward direction after the sharp decline in US inventories, which many consider a sign of a recovery in demand among the world’s largest economies.

In addition, there are some factors related to risk trends in global financial markets, most notably the economic data that showed positive momentum during trading, which is also in favour of the Canadian currency.

The Canadian currency rose to such an extent that the USD/CAD pair fell to 1.3474, compared to the previous daily close, which recorded 1.3522.

The pair rose to the highest levels throughout the current trading day at 1.3467, compared to the lowest levels recorded at 1.3534.

The Bank of Canada provided the markets with a dose of negativity in the interest statement issued last Wednesday after announcing the decision to keep current rates unchanged, continuing the quantitative tightening policy adopted by the central bank in the recent period to combat inflation.