The Canadian dollar fell against the US dollar and the Japanese yen today on concerns about the French elections. The currency trimmed its losses, but remains below the opening price for now. The loonie rose versus the euro.
Risk aversion prevails in the Forex market today as the presidential elections in France make investors concerned about the futures of the eurozone. There are also plenty of other reasons to worry about Europe, but France is currently on the forefront of news headlines. The Standard & Poor’s 500 Index was down 1 percent. Other growth-related assets also suffered.
Not all is bad for the Canadian currency. The Bank of Canada maintained interest rates unchanged last week, but the statement was surprisingly hawkish. An interest rate hike is expected next month and such expectations are likely to support the loonie in the immediate future.
USD/CAD was up from 0.9917 to 0.9978 before trading at 0.9938 as of 15:51 GMT today. CAD/JPY dropped from 82.08 to 81.60, following the fall to 81.20. EUR/CAD slipped from 1.3071 to 1.3048, erasing the earlier advance to 1.3121.
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