Canada’s dollar volatile as Crude Oil declines

The Canadian dollar is trades in volatile ups and downs against its US counterpart after hitting a technical ceiling and a decline in Oil prices.

Oil falls from weaker-than-expected Chinese growth data for Q2 and the reopening of Libya’s largest Oil field.

A thick knot of technical support levels just below 1.3100 further provides a technical foundation for the reversal.

The Canadian dollar trades in volatile ups and downs against the US dollar on Monday – weakening initially at a key technical level as it tracks a decline in global Oil prices, Canada’s primary export, but then trading higher.

WTI Crude Oil declined from a peak above $77 a barrel to a low of $73.70 reached on Monday during the Asian session. Crude Oil is Canada’s largest export, so changes in price can impact on the demand and value of Canada’s dollar.

The fall in Oil price was put down to an unexpected slowdown in China’s second quarter GDP data and the resumption of Libyan supply after a brief outage.

Chinese GDP expanded by 6.3% in Q2 on year, below the 7.3% forecast by economists, according to data from the National Bureau of Statistics of China released on Monday morning.

Quarter-on-quarter Chinese GDP rose 0.8%, beating the 0.5% estimate, but lower than the 2.2% of Q1. Oil prices were further depressed after Libyan production came back online following a brief outage amid protests by the Al-Zawi tribe over the kidnapping of the Libyan Finance Minister, Faraj Bumatari. His release led to the reopening of the Sharara and El Feel Oil fields on Monday.