Analysts at Royal Bank of Canada note that Canadian dollar weakened versus US dollar as the data released yesterday showed that US crude oil inventories reached the 2-year maximum making oil price decline, stocks fall and demand for higher-yielding assets shrink. Crude supply in the United States, Canada’s major trading partner, surged during the week before May 6 by 3.78 million barrels to 370.3 million.

Trading against the single currency loonie gained on speculation Greece may restructure its debt while Canada’s economy grows stronger. Canada’s payrolls increased by 58,300 in April after 1,500 slide in March, while the unemployment rate unexpectedly dropped from 7.7% to 7.6%. In addition, in March the nation had the strongest trade surplus of C$627 million ($658 million) since November 2008, while the economists surveyed by Bloomberg were looking forward only to C$400 million.

The nation’s Finance Minister Jim Flaherty said this week that the strengthening national currency reflects confidence in the Canadian economy and that the government’s goal is not to let extreme currency fluctuations.

The pair USD/CAD rose from 0.9445 on May 2 getting above 0.9600. The pair EUR/CAD fell by 1% to the levels in the 1.3652 zone.



Chart. Daily USD/CAD