The Canadian Dollar made gains against the Pound and strengthened against the US Dollar on Thursday afternoon after data showed that the nation’s current account deficit narrowed more-than-forecast in the first quarter of 2014.
According to Statistics Canada, a strong performance from the North American nation’s exporters caused Canada’s current account deficit to narrow from -C$16 billion to –C$12.4 billion in the first quarter of the year.
The narrowing of the nation’s deficit was better than the –C$13 billion forecast by economists.
“The take away is that going forward; this momentum needs to be sustained. After the slight sell-off we saw yesterday in the ‘Loonie’ we’re moving back to our comfortable range and we’re really trying to find that next catalyst to shake the market up,” said Scott Smith a senior market analyst from Cambridge Mercantile Group based in Calgary.
The ‘Loonie’ is likely to maintain today’s gains on Friday if Friday’s first quarter economic growth data comes in positively. Economists however are expecting that the data could show a decline from 2.9% to 2%.
Investors will also be looking ahead to next week’s Canadian employment report and Bank of Canada policy statement for further guidance.
The Pound meanwhile continued to be weakened by data released earlier in the week which hinted that the UK’s housing market could be slowing.
As a result of the data release investors trimmed their bets that the Bank of England will increase interest rates by the end of the year.
The US Dollar was weakened after a report showed that the US economy contracted in the first quarter of the year, the first time it has done so since the first quarter of 2011.
The extreme winter weather of January and February was being blamed as the cause for the contraction.
Canadian Dollar (CAD) Exchange Rates
|Canadian Dollar||Pound Sterling||0.5521|
|Canadian Dollar||US Dollar||0.9232|
|Canadian Dollar||Australian Dollar||0.9945|
|Canadian Dollar||New Zealand Dollar||1.0820|
|US Dollar||Canadian Dollar||1.0830|
|Pound Sterling||Canadian Dollar||1.8113|
|Australian Dollar||Canadian Dollar||1.0059|
|New Zealand Dollar||Canadian Dollar||0.9169|