Rising commodity prices helped the Canadian Dollar (CAD) strengthen yesterday and the asset edged away from recent lows against the US Dollar (USD).
The ‘Loonie’ crept higher against the ‘Buck’, Euro and Pound as oil and copper prices rose.
The appeal of the key commodities was boosted by the World Bank’s decision to increase its global growth forecast for the year, with the global economy now forecast to expand by 3.2 per cent in 2014.
However, the commodity-driven asset’s advance against the US Dollar was brought to an end as the Federal Reserve published a fairly optimistic beige book report.
The GBP/CAD pairing largely retained declines overnight.
Canadian Dollar movement was a little restrained during local trading due to a lack of pertinent economic data for Canada, although some movement was occasioned by global developments.
The ‘Loonie’ also gained on the Pound following the British currency’s decline in the wake of a slightly disappointing UK house price report.
During North American trading the Canadian Dollar consolidated its modest gains against its US counterpart as the odds of the Federal Reserve holding interest rates lower for longer rose in response to restrained inflation data for the US.
Ironically, a report detailing the economic benefits a weaker domestic currency would have on the local economy also lent the ‘Loonie’ slight support.
Tomorrow’s lack of Canadian data could leave the GBP/CAD pairing trading in a narrow range as markets close for the weekend, but a surprising UK retail sales report may trigger volatility.
UK sales are expected to climb by 0.3 per cent, month-on-month, after advancing by 0.4 per cent in November.
Next week there are a stream of Canadian reports to look out for, including wholesale sales and manufacturing shipments figures on Tuesday, the Bank of Canada rate decision on Wednesday, the Canadian retail sales report on Thursday and Canadian inflation data on Friday.
The BOC meeting will be of particular interest as, in the view of one industry expert, ‘there is a significant minority of observers believing that a shift towards an easing bias is on the cards next week and, unless the notion is dispelled, it is hard to imagine the Canadian Dollar reversing some of its recent losses.’
UK employment and home loans reports 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,0.5607,
Canadian Dollar,,US Dollar,0.9170 ,
Canadian Dollar,,Euro,0.6735 ,
Canadian Dollar,,Australian Dollar,1.0409 ,
Canadian Dollar,,New Zealand Dollar,1.0877 ,
US Dollar,,Canadian Dollar ,1.0913 ,
Pound Sterling,,Canadian Dollar,1.7834 ,
Euro,,Canadian Dollar,1.4885 ,
Australian Dollar,,Canadian Dollar,0.9604,
New Zealand Dollar,,Canadian Dollar,0.9152 ,
[/table]
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