The Canadian Dollar Exchange Rate was in the region of 0.9986 against the US Dollar as of 11:23 am GMT
Following last week’s less-than-impressive housing starts and employment figures for Canada the ‘Loonie’ dropped to a month low against the US Dollar over the weekend.
Although the US Commerce Department revealed that the American trade deficit narrowed by more-than-forecast on the back of surging petroleum exports – boosting the outlook of the world’s largest economy – the commodity-driven Canadian currency fell below parity with its American counterpart.
Economists had predicted that the Canadian economy would add 5,000 jobs in the first month of this year so the unanticipated dip in employment, caused by a loss of 21,900 positions, weighed heavily on the ‘Loonie’.
This latest employment data, when viewed in conjunction with the worst housing starts figure for three years, has heightened concerns that the world’s 11th largest economy is slowing and turned investors away from the Canadian Dollar.
As one industry expert asserted: ‘The sentiment for the Canadian economy has been shifting, and something like the jobs data sends a signal that we’re in more of a precarious situation today than we thought.’
This week’s manufacturing data is also expected yield disappointing results, with economists predicting that Canadian manufacturing sales fell by 0.8 per cent in December after November’s rise of 1.75 per cent. The data is scheduled for release on Friday.
Last month Mark Carney (the current Governor of the Bank of Canada) asserted that it would take the Canadian economy longer than expected to return to full output, meaning that raising interest rates was not as urgent as it had previously appeared.
Investors have now pared bets that an interest rate rise will occur in 2013.
As one of Canada’s main exports, falling oil prices also pulled the ‘Loonie’ lower, but the Canadian Dollar’s losses were limited by the positive trade deficit news from the US.
Foreign exchange strategist Sebastien Galy commented: ‘What matters more for Canada is the US market, and the trade balance improved a lot in the US. That’s the reason why dollar-Canada, even though it got hit and the risks are asymmetric, considering how badly positioned the market is for news out of Canada, it’s really a very subdued reaction.’
Global economic developments also meant that the ‘Loonie’ was able to achieve its first five-day gain on the Euro for more than four weeks, strengthening by 1.5 per cent.
Current Canadian Dollar Exchange Rates
The Canadian Dollar to Euro exchange rate is currently trading at 0.7418
The Canadian Dollar to Pound Sterling exchange rate is currently trading at 0.6323
The Canadian Dollar to US Dollar exchange rate is currently trading at 0.9935
The Canadian Dollar to Australian Dollar exchange rate is currently trading at 0.9679
The Canadian Dollar to New Zealand Dollar exchange rate is currently trading at 1.1929
The Canadian Dollar to Emirati Dirham exchange rate is currently trading at 3.6590
The Canadian Dollar to Swiss Franc is currently trading at 0.9123
The Canadian Dollar to Japanese Yen exchange rate is currently trading at 92.7961
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