Federal Reserve tapering speculation was fuelled by the FOMC’s meeting minutes overnight and this, coupled with comments issued by Bank of Canada Governor Stephen Poloz, left the Canadian Dollar weaker against the Pound and close to a four-year low against the US Dollar.
Poloz asserted that he is in no rush to increase interest rates and that if deflation becomes a concern the central bank is willing to cut rates to counteract the issue.
Crude oil futures also fell, adding to the pressure piling on the ‘Loonie’.
The commodity-driven currency’s downward trend prompted the Royal Bank of Canada to forecast that the Canadian Dollar could hit its lowest level since 2009 in the short term.
Industry experts were today quoted as saying; ‘Weak domestic data flow prompted the initial leg higher during yesterday’s session, and BoC Governor Poloz commented in an interview after the close that he is not under pressure to raise the policy rate. We retain our core bullish view on Dollar-Canada’.
The Canadian Dollar was also adversely affected by the news that Canadian building permits plummeted by 6.7 per cent in November while the nation’s new housing price index was unchanged.
Economists had forecast a 2.7 per cent decline in building permits in November and a gain of 0.1 per cent in the new housing price index.
The Pound meanwhile has enjoyed a buoyant relationship with several of its major rivals thanks to the UK’s brightening economic outlook and today’s positive domestic trade data.
The ‘Loonie’ held at a four-year low against the US Dollar as US jobless claims were shown to have fallen to a one-month low.
Claims fell by 15,000 in the week ending January 4th, a drop of 5,000 more than expected.
With the highly influential US non-farms payrolls report scheduled for release tomorrow, this report signals further improvement in the US labour market.
Before the weekend significant Canadian Dollar movement is likely to occur following the release of domestic employment figures.
The Canadian economy is expected to have added 14,100 positions in December, leaving the unemployment rate at 6.9 per cent at the close of 2013.
A surprising result could have a considerable impact on the Canadian Dollar.
Current 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,
,US Dollar,0.9216 ,
Canadian Dollar,,Euro,0.6766 ,
Canadian Dollar,,Pound,0.5597 ,
Canadian Dollar,,Australian Dollar,1.0371,
Canadian Dollar,,New Zealand Dollar,1.1324 ,
British Pound,,Canadian Dollar,1.7868 ,
US Dollar,,Canadian Dollar,1.0852 ,
Euro Dollar,,Canadian Dollar,1.4720,
New Zealand Dollar,,Canadian Dollar,0.8918,
Australian Dollar,,Canadian Dollar,0.9642,
[/table]
(Correct as of 15:20 GMT)
Comments are closed.