USDCAD Rises as Japanese Data Hits Energy Expectations

Canadian dollar was lower Monday while the greenback gained strength in the wake of data showing Japan has fallen back into recession.

The loonie was down 0.22 of a cent to 88.46 cents US as the world’s third-largest economy contracted at a 1.6 per cent annual pace as housing and business investment dropped following a sales tax hike.

Japan emerged from its last recession just as Prime Minister Shinzo Abe took office in December 2012, saying he would end two decades of stagnation with a combination of lax monetary policy, strong fiscal spending and “drastic” economic reforms — a strategy dubbed “Abenomics.”

But consumer spending is faltering as the population shrinks and grows older. Japanese manufacturers have lost their leading edge in innovation while shifting production to cheaper locations offshore.

Energy is also a major focus for the commodity-sensitive Canadian dollar this week after concerns about demand and global oversupply pushed crude to below US$75 for the first time in four years. On Monday, the December contract in New York was down 82 cents to US$75 US.

via The Globe and Mail

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza