The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate was trending within a limited range on Monday.
With the potential for a Greek exit from the Eurozone mounting, market sentiment dampened considerably.
Fears that the Grexit will have far-reaching ramifications have seen increased demand for safe-haven assets. The ‘Aussie’ (AUD) softened versus most of its major peers thanks to its risk-correlated qualities.
Similarly, the ‘Loonie’ (CAD) softened versus the majority of its most traded currency rivals as a result of waning risk appetite. Better-than-expected data, however, has caused the decline to slow somewhat.
The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate is currently trending in the region of 0.9737.
As explained above, the current crisis bubbling with regards to a potential Grexit has seriously impacted on market sentiment. As a high-yielding asset, the ‘Aussie’ struggles when geopolitical tensions dominate news.
‘It feels like investors still don’t have a lot of conviction about the market and are coming into trades for a quick flip,’ said a senior banker.
There is the possibility for ‘Aussie’ volatility later on Monday evening with the publication of the weekly consumer confidence data.
The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate dropped to a low of 0.9692 today.
In addition to damp risk sentiment causing a ‘Loonie’ downtrend, dipping oil prices also added downwards pressure on the Canadian Dollar. ‘The crash in oil prices happened fast and furiously, and now we’re getting those series of layoffs, and rig counts are dropping,’ Economist Liz Ann Sonders says. ‘And now people are concerned: Is this going to carry further into the economy? How much of this is a function of weak global growth?’
However, better-than-expected Canadian Data has prevented a larger ‘Loonie’ declination. Housing Starts was forecast to drop a little from 179, 600 to 178, 500, but the actual result reached 187, 300. ‘The expected slowing in housing starts in energy dependent regions in January failed to materialize, indicating that at this stage, the commodity price plunge is not yet negatively feeding through to confidence channels and into homebuilding activity,’ wrote Royal Bank of Canada economist Laura Cooper.
Given that geopolitical developments are dictating trade, and with more Australian data due for publication on Monday evening, the Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate is likely to fluctuate.
The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate reached a high today of 0.9777.
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