The Pound (GBP) softened and the Euro (EUR) fell against the Canadian Dollar (CAD) on Friday to trade close to its lowest level since November 2013 after weak Eurozone data weighed on the single currency and as better-than-forecast GDP data bolstered the North American currency.
Disappointing retail sales data out of Germany and Italy, a further fall in the 18-member Eurozone’s inflation rate and growing expectations that the European Central Bank will introduce monetary easing measures at next week’s ECB policy meeting all put sustained pressure upon the Euro.
Against the US Dollar (USD), the Euro is on track to make a seventh consecutive weekly loss, the worst run of declines seen in more than a decade.
Sterling meanwhile was supported earlier in Friday’s session due to a better than forecast consumer confidence report published by research group GfK and a surprisingly strong nationwide house price report. The rise in house prices countered some of the rhetoric that the UK’s housing market is experiencing a slowdown.
Both currencies then fell against the Canadian Dollar in the afternoon as data published by Statistics Canada showed that the Canadian economy strengthened its fastest pace in three years in the second quarter.
Gross Domestic Product (GDP) expanded by 3.1% on a year-to-year basis in the April to June quarter, beating economist forecasts for a figure of 2.7%. The figure marked the strongest performance of the nation’s economy since the first quarter of 2012 when GDP expanded by 6.2%.
The positive data also means that the Canadian economy is doing better than the Bank of Canada expected. It had forecast for a second quarter GDP figure of 2.5%.
The cause for the better than expected data was said to be down to improving exports which surged by 17.8% in the second quarter of 2014.
Also supporting the ‘Loonie’ was an increase in crude oil prices. The value of the commodity which is Canada’s biggest export increased by 48 cents to $95 per barrel.
Canadian Dollar Exchange Rate Forecast
The Canadian Dollar could see sentiment towards it turn negative over the weekend if the crisis in Ukraine escalates. Investors are keeping a cautious eye on the situation after Ukraine accused Russia of invading the east of the country.
According to NATO, up to 1,000 Russian troops are in Ukraine.
Russian President Vladimir Putin blamed the Ukrainian government for the crisis, comparing its siege of two cities held by separatists, Donetsk and Luhansk, to the siege of Leningrad by Nazi Germany in World War Two.
If the situation deteriorates, the ‘Loonie’ give up its gains as investors seek shelter in safe haven currencies.
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,0.5560 ,
Canadian Dollar,,US Dollar,0.9223 ,
Canadian Dollar,,Euro,0.6994 ,
Canadian Dollar,,Australian Dollar,0.9865,
Canadian Dollar,,New Zealand Dollar,1.0840 ,
US Dollar,,Canadian Dollar,1.0843 ,
Pound Sterling,,Canadian Dollar,1.7979 ,
Euro,,Canadian Dollar,1.4305 ,
Australian Dollar,,Canadian Dollar,1.0131 ,
New Zealand Dollar,,Canadian Dollar,0.9077 ,
[/table]
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