Declining crude oil futures coupled with growth fears sparked by the ongoing federal shutdown saw the Canadian Dollar fall against several of its main rivals today, including the Pound and US Dollar.
The ‘Loonie’ lost ground against the majority of its currency counterparts as the Federal stalemate continued for a seventh day.
The Canadian Dollar Exchange Rate was in the region of 0.6029 against the British Pound as of 14:45 GMT
Although top ratings agency Moody’s Investors Service has stated that it sees the odds of the US defaulting on its debt payments as ‘very low’, the current deadlock seems no closer to being resolved, and the long term repercussions for the US economy – as well as the economies of nations which rely on the US for trade, like Canada – could be substantial.
Chief Executive Officer Ray McDaniel was quoted as saying; ‘There is, we still think, a good chance that there will be resolution around the debt ceiling. Even if there’s not resolution on the debt ceiling, we think that the likelihood that Treasure security payments would be prioritised highly is strong.’
President Barack Obama has also stated that he believes Congress will come to an accord regarding raising the 16.7 trillion Dollar debt limit by the deadline of October 17th, and so avoid potentially disastrous results.
According to the Treasury, if a default occurs; ‘Credit markets could freeze, the value of the Dollar could plummet, US interest rates could skyrocket. The negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse’.
The CAD/GBP exchange rate hit a low of 0.6022
The ‘Loonie’s decline was exacerbated by a report showing that building permits in Canada plummeted, tumbling from an upwardly revised record-high of 21.4 per cent in July.
While economists forecast that permits would increase by 7.4 per cent in August they actually dropped by 21.2 per cent, a slump in value of 6.34 billion Canadian Dollars.
The data showed a 5.4 per cent drop in residential permits, a 37.9 per cent decline in permits for non-residential construction and a whopping 45.8 per cent slump in permits for commercial projects.
In a statement issued with the report Statistics Canada said; ‘With this decline, the trend in the value of building permits has become relatively flat since the beginning of 2013.’
Other Canadian data to focus on this week includes housing starts, international merchandise trade, unemployment rate, employment change and a gauge of business outlook future sales.
Current Canadian Dollar (CAD) Exchange Rates:
< Down > Up
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9683 <
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7136 <
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6029 <
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0296 >
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: 1.6617 >
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0329 >
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.4013 >
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8566 >
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9715 <
(Correct as of 14:45 GMT)
Comments are closed.