Yesterday’s Bank of Canada rate decision left the ‘Loonie’ languishing against its currency counterparts and the GBP to CAD exchange rate largely held gains despite today’s Canadian inflation data.
The Canadian Dollar clawed back some of its losses against peers like the Pound, Euro and US Dollar as domestic inflation figures revealed a rebound in March.
After slowing to 1.1 per cent the previous month, the nation’s inflation rate advanced to 1.5 per cent in March thanks to climbing energy costs.
The report, compiled by Statistics Canada, also put core inflation at 1.3 per cent.
While the 1.5 per cent total inflation rate beat the 1.4 per cent projection of economists, the core rate was in line with expectations.
Modest price gains occurred in all but two of the eight main components of inflation.
Yesterday BOC Governor Stephen Poloz asserted that core inflation isn’t likely to achieve the central bank’s 2 per cent target until the first quarter of 2016, and while today’s report did push the Canadian Dollar slightly higher against the ‘Greenback’, gains were limited.
According to chief economist Douglas Porter; ‘Canadian inflation is now consistently surprising to the high side of expectations after running to the other way for most of 2013. With energy prices on the hop and the Canadian Dollar on the fade, it looks increasingly likely that the days of downside risks for inflation are in the rear-view mirror’.
The commodity-driven Canadian Dollar also derived some support from the news that the price of Brent oil climbed as a result of Ukraine tensions.
That being said, the Pound’s bullish relationship with the ‘Loonie’ continued on Thursday and many investors expect the British asset to trend higher over the long weekend.
Canadian data is limited next week so movement in the currency will most likely be occasioned by global economic developments.
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,0.5411,
Canadian Dollar,,US Dollar,0.9094,
Canadian Dollar,,Euro,0.6566,
Canadian Dollar,,Australian Dollar,0.9726,
Canadian Dollar,,New Zealand Dollar,1.0528,
US Dollar,,Canadian Dollar ,1.0996,
Pound Sterling,,Canadian Dollar,1.8472,
Euro,,Canadian Dollar,1.5230,
Australian Dollar,,Canadian Dollar,1.0285,
New Zealand Dollar,,Canadian Dollar,0.9496,
[/table]
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