Prior to the release of US GDP figures the Canadian Dollar was able to post its first notable advance against the US Dollar for nine days. The commodity-driven currency was supported by European Central Bank President Mario Draghi’s pledge to maintain fiscal stimulus for as long as necessary.
The Canadian Dollar Exchange Rate was in the region of 0.9547 against the US Dollar as of 14:30 GMT
The ‘Loonie’ was then able to extend gains after official figures showed that the US economy grew by less than originally forecast in the first quarter.
Figures compiled by the Commerce Department showed that the US economy grew at an annualised rate of 1.8 per cent in the first three months of the year.
This was 0.6 per cent lower than an initial estimate of expansion of 2.4 per cent.
A negatively revised 2.6 per cent advance in household spending (down from the 3.4 per cent gain estimated) was largely responsible for the lower-than-expected growth.
Earlier this month Federal Reserve Chairman Ben Bernanke announced: ‘If the incoming data supports the view that the economy is able to sustain a reasonable cruising speed, we will ease the pressure on the accelerator by gradually reducing the pace of purchases.’
Given yesterday’s string of positive US data releases, including consumer confidence, durable goods orders and new home sales figures, whether this disappointing result is enough to prevent plans to rein in stimulus before the end of the year remains to be seen.
However, this result prompted a mild response from one economist: ‘We just got off to a slower start than expected. The second half will be better’.
The Canadian Dollar to Pound Sterling (CAD/GBP) Exchange Rate hit a high of 0.6233 pence
Earlier in the European session the Canadian Dollar, along with several of its commodity-driven currency counterparts, strengthened after Mario Draghi stated that indebted nations should concentrate more on supporting growth boosting investment and put less emphasis on tax hikes. The ECB chief also stated that fiscal policy will remain flexible and accommodative for the ‘foreseeable future’.
In response to the ‘Loonie’s movement currency strategist Jane Foley commented: ‘All of these central bankers have been trying to say, look here, the Fed isn’t talking about tightening policy, it’s just talking about reducing the accommodation and policy will remain accommodative. Canada Dollar as a consequence is off its worst levels against the US Dollar, it’s off its worst levels yesterday. That said, the environment is clearly jittery.’
As the week progresses US news will remain a key cause of market movement, but Canadian Dollar fluctuations will also be driven by Canadian GDP figures, out on Friday 14:30 GMT
Current Canadian Dollar (CAD) Exchange Rates
< Down > Up – Little Changed
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9547 >
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7321 >
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6209 >
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0266 <
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.2284 <
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.6106 <
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0469 <
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.3646 <
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8144 >
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9744 >
(Correct as of 14:30 GMT)
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