Yesterday’s rather dovish comments from the Bank of Canada pushed the ‘Loonie’ to a four-year low against the US Dollar and helped the Pound consolidate prior gains against its Canadian currency counterpart.
The GBP/CAD pairing was riding high as the UK unemployment rate unexpectedly plummeted to 7.1 per cent in the three months through November and the BOC advocated the benefits of a weaker domestic currency.
Disappointing UK CBI reported sales data had little impact on the GBP/CAD pairing and speculation that the Bank of England will soon raise interest rates from record lows lent Sterling underlying support.
However, shortly after the North American session opened the Canadian Dollar fluctuated as a result of Canadian retail sales figures.
Sales climbed by 0.6 per cent month on month in November following a decline of 0.1 per cent in October. Economists had only foreseen a sales increase of 0.2 per cent.
Retail sales less autos advanced by 0.4 per cent MoM following a positively revised 0.5 per cent gain.
The increase in sales was largely due to heightened demand for tools used to cope with an early bout of bad winter weather.
According to Statistics Canada; ‘Colder weather and earlier than normal winter snowfalls advanced the purchase of winter merchandise at clothing and clothing accessories stores.’
‘Loonie’ gains were limited after the news as a separate report showed that the number of Canadians filing for unemployment benefits rose in November, advancing by 0.2 per cent month-on-month. On the year the number of jobless benefit claims fell by 7.0 per cent.
Canadian Dollar movement was also restrained ahead of the release of domestic inflation data.
As inflation concerns could push the Bank of Canada into issuing a rate cut investors will be paying keen attention to the report.
Economists are forecasting that Canada’s consumer price index fell by 0.2 per cent in December, MoM, and rose 1.4 per cent on the year.
Tomorrow’s UK BBA loans for house purchase figures could also impact the GBP/CAD pairing.
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,0.5404,
Canadian Dollar,,US Dollar,0.8991 ,
Canadian Dollar,,Euro,0.6585,
Canadian Dollar,,Australian Dollar,1.0229,
Canadian Dollar,,New Zealand Dollar,1.0845 ,
US Dollar,,Canadian Dollar ,1.1121 ,
Pound Sterling,,Canadian Dollar,1.8456 ,
Euro,,Canadian Dollar,1.5172,
Australian Dollar,,Canadian Dollar,0.9780,
New Zealand Dollar,,Canadian Dollar,0.9224 ,
[/table]
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