At the close of last week the ‘Loonie’ dropped against the majority of its most traded currency counterparts as Canadian employment figures showed an unexpected decline in positions.
The news that the Canadian economy shed 7,000 jobs in February rather than adding the 15,000 positions expected saw the nation’s Dollar shed earlier gains and close the session lower against rivals like the Pound and US Dollar.
However, during Monday’s European session the Pound edged lower against the ‘Loonie’ as the Bank of England’s possible connection to exchange rate fixing piled pressure on Sterling.
Shortly after North American markets opened the Canadian Dollar was able to extend gains against the Pound thanks to upbeat local housing data.
Last month Canadian housing starts rose by 192,100 following a positively revised increase of 180,500 in January.
Economists had expected housing starts to increase by 190 ,000.
The increase was the first for four months and was largely the result of a surge in multiple-unit urban starts.
While the result was more upbeat than expected, economist Connor MacDonald still noted; ‘Despite February’s modest increase of construction activity, an air of economic fatigue still weighs heavy on domestically-oriented sectors.’
The Canadian Dollar put in a more patchy performance against several of its other most traded rivals as Chinese trade data sparked a bout of risk aversion and triggered a decline in commodities like crude oil.
With China’s exports unexpectedly slumping by 18.1 per cent and imports increasing by over 10 per cent China posted a trade deficit of 23 billion Dollars, its largest for two years.
The disappointing result added to concerns regarding a slowdown in the world’s second largest economy and caused commodity-driven currencies, like the Canadian, Australian and New Zealand Dollars, to slip.
As the week continues there are several influential Canadian reports to be aware of, including Thursday’s new housing price index and capacity utilisation rate.
However, GBP/CAD movement is more likely to be driven by UK news. If this week’s British growth, trade and manufacturing/industrial production reports come in at or above estimated levels the Pound could enjoy a more bullish relationship with its Canadian peer.
Of course US news, like Thursday’s retail sales figures, will also be of interest. As will Ukraine developments. Signs that tensions are escalating in Eastern Europe could push investors away from higher-risk assets like the Pound and Canadian Dollar and towards safe-haven peers like the US Dollar and Yen.
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,0.5410,
Canadian Dollar,,US Dollar,0.9008,
Canadian Dollar,,Euro,0.6489,
Canadian Dollar,,Australian Dollar,0.9976,
Canadian Dollar,,New Zealand Dollar,1.0657,
US Dollar,,Canadian Dollar ,1.0980,
Pound Sterling,,Canadian Dollar,1.8467,
Euro,,Canadian Dollar,1.5410,
Australian Dollar,,Canadian Dollar,1.0021,
New Zealand Dollar,,Canadian Dollar,0.9390,
[/table]
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