Although the Canadian Dollar was supported yesterday by an increase in crude oil prices and a positive wholesale sales report, ahead of the publication of Canadian consumer price data the ‘Loonie’ softened against the US Dollar and declined against a broadly strengthening Pound.
The Canadian Dollar Exchange Rate was in the region of 0.6315 against the British Pound as of 14:15 GMT
Economists forecast that the consumer price figures would show that inflation remained below the Bank of Canada’s 2 per cent target.
Before the report was released currency strategist Camilla Sutton stated: ‘Governor [Stephen] Poloz [of the Bank of Canada] has commented that protecting the inflation mandate from the low and high side is important. Should CPI not begin to trend higher, it will invoke a policy response, likely a signal that interest rates in Canada are on hold for longer than is currently prices in.’
Sutton also observed: ‘In Canada, we don’t really have much of an inflation problem at all. We have a disinflation problem where we’ve seen inflation fall well below the central bank’s target.’
The CAD/GBP exchange rate hit a low of 0.6299
When published the data met expectations by revealing that the consumer price index advanced by 1.2 per cent from the same period of the previous year.
Meanwhile, Sterling was able to strengthen against its peers on the expectation that next week’s UK GDP data will confirm that the nation’s economy expanded by 0.6 per cent in the second quarter of the year, twice as much as was recorded in the first three months of 2013.
As analyst Eimear Daly commented: ‘The Pound is being supported by evidence that the economic recovery is gaining traction. The market consensus is that GDP data next week will support that view. It’s likely the data may surprise on the upside.’
Next week the Canadian data to watch out for includes Tuesday’s retail sales numbers and Thursday’s average weekly earnings report.
As always, news from the US could also be responsible for Canadian Dollar movement.
Current Canadian Dollar (CAD) Exchange Rates
< Down > Up – Little Changed
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9633 <
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7341 <
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6315 <
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0450 <
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.2181 >
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.5840 >
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0381 >
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.3623 >
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8197 >
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9571 <
(Correct as of 14:15 GMT)
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