The ‘Loonie’ briefly rose after Canadian GDP figures met expectations, but gains were short lived.
The Canadian Dollar Exchange Rate was in the region of 0.9694 against the US Dollar as of 15:05 pm GMT
Canadian GDP data has shown that the nation’s economy grew by an annualised 0.6 per cent in the last three months of 2012.
This figure was in line with economists’ expectations but follows on from upwardly revised growth of 0.7 per cent in the third quarter, leading to the weakest growth in a six-month period since the recession of 2008/9.
Weaknesses in utilities, manufacturing and retail trade led to the economy contracting by 0.2 % in December, the first monthly decline since February 2012.
The main contributors to growth were mining, consumer spending and oil and gas industries.
Across the whole of 2012 the Canadian economy grew by 1.8 per cent, 0.8 per cent less than the previous year.
After the report was released the ‘Loonie’ posted a very slight gain against the US Dollar, but soon dropped again to continue trading within the region of an 8-month low.
As a currency analyst with Forexlive asserted: ‘The Canadian GDP is a sign Canada entered the year on a strong footing. But we’re already into March and these numbers are deep in the rear-view mirror, so I don’t believe it will derail the Canadian Dollar’s trajectory towards last year’s lows.’
Meanwhile, the anticipated US spending cuts came into effect today. They are already having a significant effect in America, and analysts are warning that they are likely to have a negative effect on the Canadian economy too.
As part of the cuts US Customs and Border Protection will be reducing its work hours by the equivalent of 2,750 inspectors – something which is bound to impact the 1.6 billion Dollars worth of goods which cross the Canadian/US border on a daily basis.
Earlier this week the industry group Canadian Manufacturers and Exporters commented that the cuts could lead to longer waits at border crossings as well as increasing the time it takes to process goods. They issued a statement saying: ‘Just-in-time shipments, critical parts deliveries, perishable commodities and cross-border business travel are among the most vulnerable sectors to feel the border pinch’.
But there are other concerns too. As industry expert Bill Anderson asserts: ‘In the longer term I think it’s going to be more of a general impact besides just the border delays. It’s going to have a big impact on maybe slowing down the North American economy, which is bad for Canada in general.’
The Canadian Dollar’s declines against the US Dollar were exacerbated as the American currency broadly strengthened when investors flocked to safe-haven assets as the series of US spending cuts came into effect.
Current Canadian Dollar Exchange Rates
The Canadian Dollar to Euro (CAD/EUR) exchange rate is trading at 0.7460
The Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate is trading at 0.6452
The Canadian Dollar to US Dollar (CAD/USD) exchange rate is trading at 0.9694
The Canadian Dollar to Australian Dollar (CAD/AUD) exchange rate is trading at 0.9504
The Canadian Dollar to New Zealand Dollar (CAD/NZD) exchange rate is trading at 1.1748
The Canadian Dollar to Japanese Yen (CAD/JPY) exchange rate is trading at 89.8914
These exchange rates were correct as of 15:05 pm GMT
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