The strengthening of the Canadian dollar finally faltered after being impacted by stronger American dollar trading ahead of the release of Canadian employment data.
Throughout the week, the loonie dollar has exhibited an encouraging performance despite other major currencies depreciating following the strengthening US dollar.
However, the currency began to give way to the strength of the greenback dollar as the market headed towards the weekend and was also affected by crude oil trading which stopped from continuing to rise.
In the Asian session, the loonie traded around the week's lows of 1.2695 against the US dollar after declining 1.1% in the previous session. This decline is also the largest recorded loonie dollar since August 2021.
In addition to US inflation data, investors will also be shown with the release of a Canadian jobs report which is expected to continue to show a strengthening in the labor market in May.
The Central Bank of Canada (BOC) is among the major central banks that have moved forward in tightening policy, where it has raised interest rates 3 times to 1.50% so far.
Governor Tiff Macklem said that inflation data would determine how quickly Canadian interest rates would rise, giving an indication that the central bank would continue further tightening.
