Prior to the Bank of Canada’s rate decision the commodity-driven ‘Loonie’ enjoyed a surge against its peers, advancing by the most for nearly a month against the US Dollar as better-than-forecast economic data from China and Australia improved the global outlook and supported higher-risk assets. However, the currency continued to trade lower against a bullish Pound, which was boosted early into the European session by better-than-forecast UK services PMI.
The Canadian Dollar Exchange Rate was in the region of 0.6103 against the British Pound as of 15:45 GMT
In response to the Canadian Dollar’s movement Toronto-based forex expert Brad Schruder commented: ‘Canada is riding the coattails from overnight positive data. I think this is more a story of the Canadian Dollar just being caught up in overall positive effects coming out of Asia.’
However, the Canadian Dollar largely retained gains against peers like the ‘Greenback’ after the BOC rate decision, despite data revealing that Canada’s trade deficit widened in July to C$931 million, surpassing even the most gloomy of economist’s forecasts. Poor export demand from Europe was cited as a primary cause of the expanding trade gap.
The CAD/GBP exchange rate hit a low of 0.6069
Meanwhile, the BOC opted to hold its main interest rate and reaffirm that the fiscal policy currently being deployed continues to be necessary.
BOC Governor Stephen Poloz asserted that people can expect ‘a gradual normalisation of policy interest rates’ as inflation returns to target, but the BOC also stated that ‘Uncertain global economic conditions appear to be delaying the anticipated rotation of demand in Canada towards exports and investment.’
According to one industry expert the reason why the Canadian Dollar continued to trade higher after the rate announcement is because ‘It’s become more of a domestic discussion about when they think the domestic situation is going to improve. We’ve seen weaker growth, we’ve seen little core inflation risk. There’s a risk of the Canadian Dollar falling even more if the bank is more dovish in its guidance.’
The publication of the Federal Reserve’s beige book may support the case for the Fed tapering easing over the next couple of weeks and prove the catalyst for additional CAD/USD fluctuations before the close of the North American session.
Looking ahead to tomorrow, CAD/GBP fluctuations are likely to be inspired by the Bank of England’s rate decision.
Current Canadian Dollar (CAD) Exchange Rates:
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The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9520 >
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7230 >
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6103 >
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0389 <
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.2079 <
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.6386 <
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0503 <
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.3842 <
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8286 >
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9628 >
(Correct as of 15:45 GMT)
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