Yesterday the Canadian Dollar was able to advance to a month-high against its US counterpart on the strength of a CPI surge, with Canadian prices increasing by the most for twenty years. The ‘Loonie’ went on to fluctuate as Eurozone woes ate away at investors’ appetite for risk.
The Canadian Dollar Exchange Rate was in the region of 0.9843 against the US Dollar as of 12:52 pm GMT
Prior to the release of Canadian GDP figures the ‘Loonie’s fluctuations continued.
Economists forecast that the data would show growth of 0.1 per cent after the previous month’s contraction of 0.2 per cent.
Meanwhile, foreign exchange expert Blake Jesperson commented ‘If the number does surprise to the upside, which we are predicting, we could finally see a move down through C$1.0150, but I don’t think it’s going to be a major move today. That’s going to be the theme for the rest of the year, US economy outperforming the Canadian, and therefore we do slightly favour the US Dollar.’
The prediction for a surprise to the upside proved accurate as the Canadian GDP figure was actually slightly stronger than expected.
According to Statistics Canada, GDP rose a seasonally adjusted 0.2 per cent, rather than the 0.1 per cent anticipated.
Canadian Industrial Product Price data also exceeded expectations, coming in at 1.4 per cent – 1.0 per cent more than estimated.
As US data was less positive, with jobless claims increasing by more than forecast and US economic growth in the fourth quarter proving to be less impressive than forecast, the ‘Loonie’ could gains on its US counterpart over the course of the afternoon.
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