The Canadian Dollar could be about to enter its strongest period of seasonal strength of the year. Typically from mid-March to the end of May the currency on average gains by 2 cents.
So far this year the currency has been under a lot of pressure since the middle of January when it reached the 1.0189 cent mark. It has been affected by a series of disappointing economic news and data releases which included a 16% drop in existing home sales in February, a slowdown in the nations GDP in the fourth quarter of 2012 and a 2.1% decline in retail sales in December.
Despite the negatives the Canadian Dollar has seen some good news too. The nation’s trade balance improved at the start of the year and employment rocketed by 50,700 in February alone. The countries banks have also been doing well with many posting record first-quarter earnings.
The biggest reason for the ‘loonies’ relative weakness has been the strength of the US Dollar. The US Dollar has seen its value rise as investors favour the currency after the USA posted strong economic data and continued to show signs of that the world’s biggest economy is steadily recovering. In the short term the decline in the Euro over the weekend has and is likely to contribute to further strengthening of the ‘Greenback’ at the expense of the ‘Loonie’.
So what could trigger the Canadian Dollar to strengthen over the next few weeks? The second quarter of the year typically sees Canadian exports increase as demand for the nation’s commodities such as coal, oil, metals and foodstuffs rise. Canada has already posted record levels of crude oil in February suggesting that the coming months could see an even bigger rise in demand and raise the value of the ‘Loonie’.
Current CAD Exchange Rates
The Euro to Canadian Dollar (EUR/CAD) exchange rate is trading at 1.3256
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trading at 1.5452
The US Dollar to Canadian Dollar (USD/CAD) exchange rate is trading at 1.0243
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