Canadian Dollar Declines to 2017 Lows as Crude Oil Price Crashes 5%

The Canadian dollar continued to slide on Wednesday, hitting a 64-day low of 1.34952 at 1:10 p.m. EST. This is the lowest the CAD has been against the USD this year.

While Canada’s currency has been losing ground since the beginning of March due to persistent economic slack and falling retail sales, today’s losses were mainly driven by the crash of oil prices.

Crude oil futures collapsed close to 3.8% today after the U.S. Energy Information Administration (EIA) said crude oil inventories in the United States had risen to 8.2 million barrels.

The news sent the price of crude oil crashing from $52.80 to under $51 a barrel. By 2:30 p.m. EST, oil futures were trading at an 82-day low of $50.14.

Although the Canadian currency had sustained losses of 0.40% before oil inventories were released, the CAD dropped even further against the greenback in the aftermath of the EIA report.

Even better-than-expected housing starts, released by the Canada Mortgage and Housing Corporation, which came in at 210k for February, could not halt the decline of the Canadian dollar.

At press time, the USD/CAD exchange rate is hovering just under 1.35.

Canadian banknotes photo by Mike Gifford