Despite industry experts betting that US lawmakers will reach an agreement by October 17th and avoid a default, the rocky political situation in the world’s largest economy weakened the commodity-driven Canadian Dollar on Friday.
The ‘Loonie’ softened against the Pound and posted its most significant decline against its US counterpart for seven-weeks.
The Canadian Dollar Exchange Rate was in the region of 0.6038 against the British Pound as of 14:50 GMT
The currency was also adversely affected as data showed Canada’s trade deficit expanded and crude oil (a major Canadian export) dropped to a month low.
As last week came to a close Toronto based economist David Watt asserted; ‘The weakness in the ‘Loonie’ reflects the uncertainty regarding the US shutdown, and the possible economic implications it may have for the Canadian economy. The market has been optimistic about resolution, but until the uncertainty is cleared up the Canadian currency will show stress.’
However, while the Canadian Dollar dipped against the Pound and shed 0.5 per cent against the US Dollar before the weekend, the positive Canadian employment data released earlier in the week helped to limit declines.
The CAD/GBP exchange rate hit a low of 0.6019
Today currency market movement has been a little restricted due to the US national holiday, but US political discussions continue to dominate the headlines.
In a recent speech Canada’s Finance Minister Jim Flaherty revealed his concerns over the inability of US President Barack Obama and Republican lawmakers to reach an agreement.
During a televised interview Flaherty stated; ‘I was discouraged. The US economy is the biggest in the world and it affects all of us […] We have some serious economic problems in the world, and we need to be mindful of that.’
Flaherty also said that he doesn’t believe Canada will enjoy ‘huge economic growth’ over the next few years.
During the European session the Canadian Dollar weakened further against the Pound as the British currency was supported by the expectation that this week’s UK employment, retail sales and inflation data will show improvement.
Canadian data to watch out for this week includes tomorrow’s existing home sales report and Friday’s consumer price index.
US developments will also inspire ‘Loonie’ volatility this week.
Current Canadian Dollar (CAD) Exchange Rates:
< Down > Up
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9661 <
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7108 <
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6038 <
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0193 <
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.1553 <
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.6595 <
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0354 >
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.4067 >
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8664 >
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9811 >
(Correct as of 14:50 GMT)
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