The Canadian dollar has weakened in value to a five-week low on Thursday as it goes up against the US dollar, while the global oil prices continue to slip away following reports in the increase of US crude inventories last week which added more to the money's decline.
At the closing of Thursday's trading session, the Canadian dollar (CAD) was going 0.3 percent lower at 1.3 to the greenback, which is roughly 76.51 US cents.
The loonie, as the CAD is commonly known in Canada, has reached its weakest point since the second week of September at 1.30.
As explained by the chief of foreign exchange strategy for BMO Capital Markets, Greg Anderson, to Reuters, the apparent decline of the currency has largely to do with the US dollar driving its way back to the top rather than any internal causes.
In its case, the almighty (US) dollar has risen to a nine-day high against a plethora of currencies. Market watchers predicted a continuing trend as concerns over Italy's budget draws impact on the euro.
The Price of Crude Oil
Adding more to the loonie's sharp plummet are the oil prices. As pointed out by a separate report from Reuters, the US crude prices were cut by 1.5 percent at $68.73 per barrel on Thursday, which sent an impact on Canada's own exports.
The data from the US Energy Information Administration revealed that the US crude oil inventories rose by 6.5 million barrels over the past few days. This is almost triple than what analysts had initially forecast.
Oil has been one of Canada's main exports, however, the global oil price could directly affect Canada's currency.
According to Anderson, there's a clear correlation between oil prices and the CAD-USD valuation which have become apparent over the last 12 months.
Domestic Data
Meanwhile, domestic data have shown the increase of non-farm payroll jobs over the past eight consecutive months.
As indicated in the report, Ottawa has added close to 30,000 jobs in September. Among the most prevalent avenues of employment include sectors of trade, education, and healthcare services.
The report on the inflation of Canadian retail sales for the past two months (from August to September) is due for release this Friday. This could help the Bank of Canada assess its expectations for additional interest rate hikes.
Economists, however, are already forecasting the country's central bank to hike in the coming weeks for the fifth time since July of last year.
