In the aftermath of the release of Canadian housing starts and trade balance data, the ‘Loonie’ fluctuated against the US Dollar and fell against the Pound.
The Canadian Dollar Exchange Rate was in the region of 0.6016 against the British Pound as of 14:20 GMT
Although the nation’s housing starts were higher-than-forecast in September, Canada’s trade deficit widened unexpectedly.
Canadian housing starts climbed at a seasonally adjusted rate of 193,637 units last month rather than the 185,000 forecast.
Meanwhile, although economists expected Canada’s deficit to come in at 700 million Canadian Dollars it actually widened to 1.31 billion Canadian Dollars in August.
July’s shortfall was negatively revised from 931 million CAD to 1.19 billion CAD, meaning that Canada’s deficit has increased for two successive months.
The CAD/GBP exchange rate hit a low of 0.6005
The widening of the deficit was primarily caused by a surge of 2.1 per cent in imports, although exports also climbed by 1.8 per cent.
In response to the data and the Canadian Dollar’s subsequent movement currency strategist Camilla Sutton commented; ‘We’ve been in a very tight range. Housing starts were a little stronger than expected, but they didn’t really change the overall trend. The focus is on the US government shutdown and how it relates to Fed policy and growth outlook.’
Higher-risk assets like the ‘Loonie’ also came under pressure as the International Monetary Fund slashed its global growth outlook and issued a stark warning regarding a possible default in the US.
The IMF reduced its global growth forecast from 3.1 per cent for 2013 to 2.9 per cent and 3.6 per cent for 2014 from 3.8 per cent.
In a statement accompanying the decision the IMF asserted that while advanced economies are showing signs of recovery, emerging-market economies continue to struggle and ‘this confluence is leading to tensions, with emerging-market economies facing the dual challenges of slowing growth and tighter global financial conditions.’
The IMF also said of the US shutdown, ‘A longer shutdown could have sizable adverse growth implications. A failure to promptly raise the debt ceiling could also adversely affect financial markets and economic activity, with spillovers to the rest of the world.’
With Canadian economic data a little light tomorrow, ‘Loonie’ volatility could occur in response to news from the UK and US.
Current Canadian Dollar (CAD) Exchange Rates:
< Down > Up
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9704 >
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7133 <
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6016 <
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0221 <
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.1714 >
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.6621 >
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0320 >
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.4004 <
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8551 <
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9786 >
(Correct as of 14:25 GMT)
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