Canadian Dollar to Pound Sterling (CAD/GBP) weaker as Chinese and US data weighs

The Canadian Dollar weakened against the Pound and fell against the US Dollar as weak Chinese trade data and a supported ‘Greenback’ weighed upon the currency.

Early in the session the ‘Loonie’s’ rally was halted as data out of China cast doubt over the strength of the world’s second largest economy. A report showed that Chinese exports fell by 6.6% from the previous year and imports tumbled by 11.3%. Economists had been forecasting for improvements. The Canadian Dollar was particularly affected by the data as it is a commodity based asset and as such relies on the export of commodities to nations such as China.

Sentiment towards the currency also received a knock after China’s Premier Li Keqiang said that the foundation for growth in China ‘is not strong’ and that the economy still faces downward pressures. He also ruled out the use of additional short-term stimulus measures.

Earlier in the week the ‘Loonie’ had been experiencing something of a rally as investors saw a number of positives for the Canadian economy such as positive GDP figures, increased business optimism and the impact of a weaker Canadian Dollar all added support.

The ‘Loonie’ was also on the back foot against the US Dollar following the release of data which showed that the number of US citizens claiming unemployment assistance last week fell to the lowest level in almost seven years.

The US Labour Department reported that the number of individuals filing for initial jobless benefits in the week ending April 4 fell by 30,000 to a seasonally adjusted 300,000 from the previous week’s upwardly revised total of 332,000. Analysts had been expecting jobless claims to decline to 320,000.

The next major event for the Canadian Dollar occurs next Wednesday when the Bank of Canada releases its latest interest rate announcement.