The Canadian Dollar surged to a one-week high against the Pound and climbed to its best level in five and a half months against the US Dollar on Friday as the release of upbeat retail and inflation data bolstered the ‘Loonie’.
The Canadian Dollar climbed as data showed that retail sales climbed to their strongest level in eleven months after rising by 1.1% in April. The increase saw sales reach an all time high level in C$41.62 billion.
Statistics Canada also revised March’s figure higher to +0.1% from a fall of -0.1%. Economists had only been expecting a rise of 0.6%.
The rise in sales was spearheaded by motor vehicle sales which increased by 2.4% to C$9.69 billion. Sales increased in 10 of 11 categories marking 98% of total sales, including a 0.6% gain in food and beverage sales to C$9.16 billion.
The ‘Loonie’ was also supported by a separate report which showed that inflation in the North American country exceeded the Bank of Canada’s target rate of 2% for the first time in more than two years as energy costs led the way.
The report showed that the nation’s consumer price index increased to 2.3% in May from the previous year.
“It emboldens the market participants that are already long on the Canadian Dollar to add these positions. You cannot have a credible central bank cutting interest rates while CPI is rising,” said Brad Schruder, director of foreign exchange at Bank of Montreal.
The Canadian Dollar Exchange Rate also made gains against the Euro.
Updated 10:05 GMT Saturday 21st June
On Friday the Canadian Dollar to Pound exchange rate surged in reaction to Canada’s surprising consumer price inflation and retail sales report. The fact that Canadian inflation pushed above the Bank of Canada’s 2% target drove the ‘Loonie’ higher against its rivals and saw it jump by 0.50% against Sterling.
The CAD/GBP exchange rate held these gains overnight and the Canadian Dollar briefly pushed above 0.93 against the US Dollar.
Next week Canadian reports are few and far between, although some movement in the Canadian Dollar to Pound (CAD/GBP) exchange rate could occur as a result of Canada’s average weekly earnings report (due out on Thursday) and Friday’s industrial product price and raw materials price indexes.
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,0.5458,
Canadian Dollar,,US Dollar,0.9293 ,
Canadian Dollar,,Euro,0.6805 ,
Canadian Dollar,,Australian Dollar,0.9894,
Canadian Dollar,,New Zealand Dollar,1.0610 ,
US Dollar,,Canadian Dollar,1.0761 ,
Pound Sterling,,Canadian Dollar,1.8320 ,
Euro,,Canadian Dollar,1.4612 ,
Australian Dollar,,Canadian Dollar,1.0108 ,
New Zealand Dollar,,Canadian Dollar,0.9426 ,
[/table]
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