At the moment it seems as though one piece of positive US data is swiftly followed by another. While certainly a good sign for the world’s largest economy, Canada’s economic performance is looking rather shoddy by contrast.
The Canadian Dollar Exchange Rate was in the region of 0.9756 against the US Dollar as of 14:06 pm GMT
Yesterday the Canadian Dollar’s four day advance on the US Dollar ended abruptly as last week’s strong employment data for the nation stopped driving the currency forward.
Although last Friday’s figures wildly exceeded expectations, with 50,700 jobs being added rather than the 8,000 predicted, industry experts are concerned that improvement in the labour market might not be enough to bolster Canada’s faltering economic growth.
The ‘Loonie’ has continued to decline against its American counterpart today amid mixed commodity prices.
Although an April contract for crude oil gained, May contracts for gold bullion and copper dipped, with the latter losing one cent a pound and the former shedding 70 cents an ounce.
The Canadian Dollar was also adversely affected as investors reacted to further positive economic news for the US.
The latest retail sales report for the US has shown a 1.1 per cent gain. This advance in February was the most significant gain for five months, following a 0.1 per cent increase in January, and was significantly more than the 0.5 per cent rise forecast by economists.
In response to the sales figures CIBC World Markets economist Andrew Grantham commented: ‘Add in a small upward revision to the prior month as well and overall it was a strong set of numbers, supportive of our call that first-quarter GDP will come in at around a 3 per cent annualised pace.’
This additional sign that the American economy is recovering its momentum, whilst having the potential to boost the global economic outlook in the long term, is currently serving to highlight the weaknesses of the Canadian economy by contrast.
As David Bradley of Scotia Capital Inc asserts: ‘One piece of good data is not going to be enough to turn the trend, and the trend in Dollar/Canada is still higher [for the USD] There’s been a lot of negative economic releases, apart from last week’s employment data, which have been negative for the Canadian Dollar.’
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