On Friday the ‘Loonie’ fell by over a cent against its American counterpart as Canadian employment data dashed hopes of the nation’s labour market spurring economic recovery.
The Canadian Dollar Exchange Rate was in the region of 0.9836 against the US Dollar as of 14:25 pm GMT
Although economists expected last week’s report to show that the Canadian economy added 6,500 jobs in March, it actually lost 54,500 jobs – completely wiping out February’s larger-than-anticipated employment gain of 50,700.
Immediately following the news the Canadian Dollar fell by 0.8 per cent against its US rival. The commodity-driven currency continued to decline, shedding over a cent, before an upward correction saw it trading in the region of 0.9829 US Dollars on Monday morning.
Today however the ‘Loonie’ has been able to break away from its largest weekly drop for six months, gaining modestly on the ‘Greenback’ as crude oil (a major Canadian export) rose.
The ‘Loonie’ could experience additional fluctuations this afternoon following the release of Canadian Business Outlook Future Sales figures.
Federal Reserve Chairman Ben Bernanke’s speech at the Atlanta Fed Conference could also inspire movement.
In the week ahead the most significant pieces of Canadian data to watch out for include Tuesday’s housing starts and building permits figures and Thursday’s New Housing Price Index.
Economists expect housing starts to decrease from 180.7K in February to 175.0K in March, and the number of building permits issued in February to have risen from 1.7 per cent to 5.0 per cent. Any further indications of economic concern in the world’s eleventh largest economy could trigger ‘Loonie’ declines.
As the US is Canada’s main trading partner, news for the latter nation (such as Friday’s influential advance retail sales data), could contribute to additional moves in the CAD/USD pairing.
The Canadian Dollar has been trading below parity with its American rival since January.
CAD/USD Fluctuates as Canadian Economic Outlook
Updated at 15:52
The ‘Loonie’ pared its slight advance against the US Dollar after a Bank of Canada survey revealed that Canadian businesses are expecting the year ahead to be economically challenging. Although the balance of opinion on investment (the difference between the percentage of businesses expecting more investment and the percentage of businesses expecting less) came in at 12 – a still positive result – it had dropped from the figure of 20 recorded in the last quarter of 2012.
Companies also asserted they experienced their worst sales performance for three years last year.
After the data was released the ‘Loonie’ dropped to 0.9812 US Dollars.
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