After gaining yesterday on the back of positive Chinese data the Canadian Dollar climbed further during local trade as a result of trade data from another commodity-driven nation.
The Canadian Dollar Exchange Rate was in the region of 0.9867 against the US Dollar as of 14:17 pm GMT
Australian trade data, compiled by the nation’s Bureau for Statistics, revealed that the country’s trade deficit shrank from $1.2 billion in January to $178 million in February – significantly better than the shortfall of $1 billion predicted by economists.
The ‘Loonie’ further benefited from decreased risk aversion, as Cyprus and IMF reached an accord regarding making a contribution of 1 billion Euro’s to the struggling nation.
The expectation that Friday’s employment report will show that 6,500 jobs were added to the Canadian economy last month has also bolstered the Canadian Dollar in recent days. If accurate this result would boost the impression of a strengthening labour market inspired by last month’s 50,700 jobs increase.
As currency strategist Shaun Osborne comments: ‘It’s been a strong start for the commodity currencies, despite the fact it’s been a pretty poor day for commodities. Canada is perhaps along for a bit of a ride on their coattails and some short-covering, given the rather excessive positioning we’ve had in the market over the last little while’.
Osborne did add that in the short-term the Canadian Dollar is likely to decline again.
The Canadian Dollar approached C$1.0145 against the US Dollar, with one ‘Loonie’ buying 0.9867 cents.
Meanwhile, the US Dollar lost ground against the Yen after US employment data failed to live up to expectations.
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