The Bank of England’s decision to leave policy unaltered and continue with its rhetoric regarding leaving interest rates at record lows saw the Pound soften against several of its major currency counterparts.
However, the British asset was able to recover losses against the Canadian Dollar as Canada posted a considerably larger-than-forecast trade deficit.
Canada recorded a trade deficit for a third month in December and the reading of -1.66 billion Canadian Dollars (which followed a negatively revised deficit of -1.53 billion Canadian Dollars in November) was considerably worse than the expected deficit of 650 million CAD forecast by economists.
The result was largely due to national imports reaching record levels.
The surprisingly bad data prompted this comment from senior economist Robert Kavcic; ‘There was no momentum for net exports at the end of 2013.’
However, while the ‘Loonie’ slid against its peers after this report was released, losses were trimmed following an upbeat PMI figure.
Canada’s Ivey Purchasing Managers Index surged from 46.3 to 56.8 in January, completely outstripping estimates for a reading of 51.0 and putting the gauge firmly back in expansion territory.
December’s reading was a 35-month low, so this jump to a three-month high was a welcome one.
However, the Pound remained stronger against the Canadian Dollar ahead of tomorrow’s Canadian employment figures.
As 2013 came to a close the Canadian economy lost a whopping 45,900 positions, so economists will be hoping for a positive revision or a strong gain in January.
UK industrial/manufacturing production and growth data will also be of interest.
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,0.5526,
Canadian Dollar,,US Dollar,0.9022 ,
Canadian Dollar,,Euro,0.6699,
Canadian Dollar,,Australian Dollar,1.0057,
Canadian Dollar,,New Zealand Dollar,1.0990 ,
US Dollar,,Canadian Dollar ,1.1080 ,
Pound Sterling,,Canadian Dollar,1.8097,
Euro,,Canadian Dollar,1.5109,
Australian Dollar,,Canadian Dollar,0.9936,
New Zealand Dollar,,Canadian Dollar,0.9124 ,
[/table]
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