The Canadian Dollar (CAD) strengthened against the Pound (GBP) on Friday after domestic economic data showed that inflation increased beyond the Bank of Canada’s target rate for a second consecutive month in June.
The ‘Loonie’ shrugged off geopolitical concerns and advanced to a weekly high against the US Dollar (USD) and also made gains against the Euro (EUR) and other major peers.
According to Statistics Canada, Consumer Price Inflation (CPI) in the North American nation increased by 0.1% in June to take the inflation rate to 2.4%, beating expectations for stagnation and remaining at May’s figure of 2.3%.
The rise also marks the fastest pace in inflation witnessed for two years.
Also offering support to the ‘Loonie’ was a separate report which showed that wholesale sales increased by 2.2% in May, beating economist expectations for a rise of 0.7%, the latest rise adds to April’s increase of 1.4%.
Earlier in the week Bank of Canada Governor Stephen Poloz said that he expects the recent rises in inflation is temporary and that prices in the country will begin to rebalance themselves later in the year.
‘Maybe he was wrong on that. Poloz seems really confident that inflation is not going to persist at these levels. I guess we will have to see whether he was right or not,’ said the managing director of foreign exchange in Toronto at Bank of Montreal in a phone interview with Bloomberg.
The Canadian Dollar was also finding support from rising oil prices as the conflict between Israel and Palestinian militants raised worries over global oil supplies.
Despite the positive data further gains were somewhat restrained as investors remained jittery from geopolitical tensions in Ukraine and Israel. On Thursday a Malaysian passenger jet crashed in Eastern Ukraine killing all 298 people on board.
The incident has led to the Ukrainians and Russians accusing the other of shooting it down. Tensions between the West and Russia have also increased as the crash comes just a day after the USA and EU announced further wide ranging sanctions.
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,0.5466 ,
Canadian Dollar,,US Dollar,0.9320 ,
Canadian Dollar,,Euro,0.6901 ,
Canadian Dollar,,Australian Dollar,0.9934,
Canadian Dollar,,New Zealand Dollar,1.0688 ,
US Dollar,,Canadian Dollar,1.0732 ,
Pound Sterling,,Canadian Dollar,1.8294 ,
Euro,,Canadian Dollar,1.4480 ,
Australian Dollar,,Canadian Dollar,1.0061 ,
New Zealand Dollar,,Canadian Dollar,0.9316 ,
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