The Canadian dollar fell against most of its major peers as government officials in Russia and Japan criticized monetary policies that have devalued major currencies in an attempt to spark economic growth.
It dropped the most in a week against its U.S. counterpart as a Russian central bank official warned the world is on the brink of a “currency war” after the Japanese economy minister said yesterday currency weakness sparked by central-bank policy could hurt consumers. Stocks fluctuated while a government report showed inflation in U.S. was unchanged last month.
Financial markets “are trading with a negative risk tone, so that’s helping to weigh on the Canadian dollar,” said Mazen Issa, Canada macro strategist at Toronto-Dominion Bank (TD)’s TD Securities by phone from Toronto. “If we look at the last two to three months, the correlation with the Canadian dollar and risk assets has tightened and equities are pretty flat today.”