Concerning economic data for Canada saw the ‘Loonie’ take a tumble against most of its currency peers today.
The ‘Loonie’ dropped against the Pound, US Dollar and Euro as separate reports showed that Canada’s deficit swelled while the nation’s Ivey PMI fell below the 50 mark separating growth from contraction.
Statistics Canada figures showed that the commodity-driven nation posted a trade deficit which was nine times wider than forecast in November.
The surprising result was largely due to a hike in imports of machinery/equipment and stagnating exports.
As October’s 75 billion Canadian Dollar surplus was negatively revised Canada has now posted a deficit for almost two years.
In contrast to the Canadian news, the US trade deficit narrowed to a four-year low thanks to dropping imports of crude oil.
The Canadian result also contradicts the Bank of Canada’s assertion that rising exports will drive growth.
As one London-based currency strategist was quoted as saying; ‘It just underlines the fact that the bank is mindful of wanting to encourage a degree of competitiveness via the currency. You look at the two trade reports, the US and Canada, and one disappointed and the other was positive.’
‘Loonie’ losses were compounded as a result of the Ivey Purchasing Managers Index.
The measure fell from 53.7 in November to 46.3 in December, a 35 month low.
The Canadian Dollar plummeted to a three year low against the US Dollar and was weaker against the Pound and Euro.
The Pound, meanwhile, was able to post modest gains against several of its major peers as a British Chambers of Commerce survey indicated that the UK’s economic recovery would continue going from strength to strength in the near term.
Tomorrow CAD/GBP movement might be limited due to a lack of influential economic news for Canada or the UK.
While developments in the Eurozone and US could drive other currency market fluctuations, CAD/GBP bulls will be looking ahead to Thursday.
If the Bank of England refrains from altering the level of asset purchases when it meets the Pound could dip and if Canadian housing data delivers a positive result the ‘Loonie’ could take advantage and advance on its British rival.
Current Canadian Dollar (CAD) Exchange Rates:
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The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9305 <
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.6837 <
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5676 <
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0446 <
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.1324 <
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.7614 >
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0737 >
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.4629 >
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8856 >
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9573 >
(Correct as of 14:30 GMT)
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