The Canadian Dollar has slumped to its lowest level in more than two weeks against its US counterpart after Friday’s annual inflation data showed that inflation fell to its slowest pace in three years.
The ‘Loonie’ declined against the majority of its most traded peers, including Sterling and the Euro after the nation’s consumer price index rose by just 0.4% in April from the previous year. The figure is the slowest since October 2009. In March it gained by 1%. The Bank of Canada had been targeting an inflation rate of at least 1 to 3%.
The weaker than expected data has caused investors to speculate that the Canadian Reserve Bank will be considering cutting interest rates in the near future to help bolster the nations slowing economy.
“There is certainly a smattering of comments now contemplating why isn’t the central bank contemplating lowering rates,” said the head analyst in Toronto at the online currency-trading firm Oanda Corp.“Policy-wise, we’re still very much walking a tightrope.”
The Canadian Dollar has also been weighed upon by the continuing upwards movement of the US Dollar and the mixed economic data coming from the States. Yesterday the US Commerce department reported that new housing starts across the country fell by 16.5% in April. A slowdown in the US housing market and the construction sector in particular can hurt Canadian lumber exports.
Comments by a US Federal Reserve official didn’t help.
John Williams, president of the Federal Reserve Bank of San Francisco, raised the prospect of the U.S. central bank’s bond-buying stimulus beginning to taper off within a few months after telling reporters he expected the Fed to begin to slowdown its monetary programme.
The mixed fortunes of commodities have also weighed upon the currency. Crude oil is up by 0.4% to $95 per barrel, whilst gold and copper have fallen in value.
Current Canadian Dollar (CAD) Exchange Rates
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9775
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7590
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6412
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.002
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.1203
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.5593
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0229
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.3175
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8306
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9970
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