The Canadian dollar has hit a two-year low against the U.S. dollar. This decline comes as the greenback gains strength due to uncertainties surrounding the upcoming U.S. election. Despite positive domestic data, the loonie struggles in the currency exchange market.
Currently, the Canadian dollar trades at 1.3950. It briefly reached an intraday low of 1.3953. Over the past week, it has decreased by 0.4%. Analysts suggest that U.S. dollar bulls may push rates higher, depending on election outcomes and trade relations.
Republican candidate Donald Trump has proposed significant tariffs on imports. Canada relies heavily on the U.S. market, sending about 75% of its exports there. Therefore, these potential tariffs could have a substantial impact on Canadian exports and overall economic impact.
In contrast, Canada’s manufacturing sector is showing resilience. The S&P Global Canada Manufacturing PMI reached its highest level in 20 months. This increase reflects rising production and employment as businesses anticipate higher orders. This positive trend supports the Canadian dollar amidst market volatility.
Moreover, oil prices are on the rise, currently at $69.68 a barrel. This increase is partly due to geopolitical tensions involving Iran. Additionally, Canadian bond yields have moved higher, following trends in U.S. Treasuries. This upward movement in bond yields may further influence the currency exchange rates for the Canadian dollar.
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The Canadian dollar hits a two-year low due to U.S. election jitters. Economic factors and manufacturing growth play a crucial role.
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