Yesterday the ‘Loonie’ received underlying support from the news that the much-debated Keystone XL pipeline might be approved by the US.
As the pipeline would boost Canadian shipments and bolster the nation’s economy, optimism surrounding its construction helped the Canadian Dollar advance on peers like the ‘Greenback’ and Pound.
In the opinion of currency strategist Camilla Sutton, evidence that the pipeline would be a more environmentally-friendly solution ‘is likely to sway Secretary of State Kerry to provide a favourable recommendation to President Obama on the construction of the pipeline, which will provide added capacity for the Canadian oil to flow into the US.’
The International Monetary Fund also offered a more upbeat growth forecast for Canada, predicting expansion of 2.2 per cent in 2014 following estimated annual growth of 1.7 per cent last year.
The commodity driven ‘Loonie’ was able to hold gains against the US Dollar as copper prices climbed and US factory orders fell in December.
Although the 1.5 per cent decline in orders was slightly better than the 1.8 per cent drop forecast, November’s gain was negatively revised and the result indicates that the world’s largest economy is still struggling in some areas.
Ahead of tomorrow’s Canadian building permits report the GBP/CAD pairing was trading slightly lower.
Despite the fact that the Pound posted modest, widespread gains following the release of UK construction figures, the Canadian Dollar retained the upper hand.
UK construction PMI surged by the most since August 2007 in January as Britain attempted to tackle its housing shortage.
As the services industry is responsible for about 70 per cent of Britain’s GDP tomorrow’s services PMI could impact the CAD/GBP pairing.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,
,Pound Sterling,0.5536,
Canadian Dollar,,US Dollar,0.9023 ,
Canadian Dollar,,Euro,0.6677,
Canadian Dollar,,Australian Dollar,1.0138,
Canadian Dollar,,New Zealand Dollar,1.1155 ,
US Dollar,,Canadian Dollar ,1.1081 ,
Pound Sterling,,Canadian Dollar,1.8064,
Euro,,Canadian Dollar,1.4971,
Australian Dollar,,Canadian Dollar,0.9860,
New Zealand Dollar,,Canadian Dollar,0.8961 ,
[/table]
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