FX.co ★ Canadian Dollar Eases Further

The Canadian dollar has declined to nearly $1.42, retreating from a peak of $1.41 reached on April 3rd, amidst growing global trade uncertainties and indications of economic weakness within Canada. A steep drop in crude oil prices, which have plummeted to a four-year low, has diminished the value of the Canadian dollar—a currency closely linked to commodities—as oil is a major export for the country. Concurrently, escalating trade conflicts resulting from U.S. President Trump's imposition of tariffs and China's reciprocal measures have heightened concerns of a worldwide economic downturn, prompting investors to flock to the U.S. dollar, viewed as a safe haven. Within Canada, these external challenges have been exacerbated by dismal economic indicators, with March employment data revealing a reduction of 32,600 jobs and an increase in unemployment to 6.7%. Persistent difficulties in the automotive, steel, and aluminum industries are pushing the Bank of Canada towards a more accommodative monetary policy. Additionally, political uncertainties surrounding the upcoming snap election on April 28 further intensify risk aversion.