As markets brace themselves for the fallout from a potential Federal shutdown over budget disputes, the ‘Loonie’ softened to a week-low against the US Dollar and weakened against a bullish Pound.
The Canadian Dollar Exchange Rate was in the region of 0.6023 against the British Pound as of 15:10 GMT
The commodity-driven Canadian Dollar lost ground against its British counterpart as the price of crude oil fell and Bank of England Governor Mark Carney supported the Pound with easing comments.
In an interview for a British newspaper Carney asserted that the broad-based nature of the UK’s return to growth meant that he saw no cause to expand stimulus at the current time.
Further ‘Loonie’ declines occurred as the US House of Representatives clashed over legislation concerning President Barack Obama’s controversial healthcare reform. If the issue cannot be resolved and a government shutdown happens, US economic growth could be reduced by up to 1.4 percentage points in the final quarter of the year.
As the US is Canada’s main trading partner a decline in GDP could have a significant impact on Canada’s own economic recovery.
According to senior currency strategist Jane Foley; ‘For the Canadian economy, this potential shock to US growth would not be welcome and therefore is something which should be reflected in the Canadian Dollar. It certainly is a negative factor, that combined with oil prices.’
The CAD/GBP exchange rate hit a low of 0.6001
The Canadian Dollar was little affected by domestic data showing that average weekly pay increased in July.
According to figures compiled by Statistics Canada, average earnings were almost unchanged month-on-month but were up 1.3 per cent on the year, with growth in weekly earnings coming in above average in five of the nation’s main industrial sectors.
June’s year-on-year increase in average weekly earnings was negatively revised to 2.1 per cent.
Canadian data to be aware of next week includes Monday’s GDP figures and Friday’s Ivey purchasing managers index.
However, considerable ‘Loonie’ fluctuations can also be expected to occur in response to China’s manufacturing PMI and the US non-farm payrolls report.
Current Canadian Dollar (CAD) Exchange Rates:
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The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9697 <
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7158 <
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6023 <
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0417 >
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.1705 <
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.6612 >
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0315 >
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.3969 >
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8531 <
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9600 <
(Correct as of 15:10 GMT)
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