The weakness of the US dollar brought the loonie to a two -month high on Wednesday, as well as getting a boost from higher crude oil prices.
Federal Reserve (Fed) Chairman Jerome Powell’s statement that a balance sheet reduction will not happen in the near future, is seen as less hawkish and not aggressive in tightening.
Meanwhile, in contrast to the less encouraging US NFP data, the Canadian jobs report did the opposite by showing readings exceeding market expectations in December.
Meanwhile, the strengthening in the energy market continued to provide support for the Canadian dollar, especially after world crude oil trade rose to its highest level since November.
This is because, the Canadian economy is highly dependent on the crude oil market, where it accounts for about 11% of the country’s Gross Domestic Product (GDP).
At the beginning of the European session, the Canadian dollar traded strong at around 1.2550 against the US dollar.
