The Canadian Dollar (along with other higher-risk assets) was boosted today as Russian President Vladimir Putin declared that Russia had no intention of dividing Ukraine any further, and the CAD to GBP pairing advanced.
On Sunday the Crimea region voted to return to Russia, and there were concerns that additional annexing of the Ukraine could occur.
However, with Putin assuaging these fears, investors rediscovered their appetite for higher-yielding assets.
Although the Pound was also supported by this development the British asset continued trading lower against the ‘Loonie’.
During North American trading the Canadian Dollar extended gains as Canadian manufacturing shipments were shown to have increased by 1.5 per cent in January, month-on-month, rather than the 0.6 per cent expected.
December’s figure was negatively revised to a decline of 1.5 per cent.
The acceleration in factory shipments was the most rapid for almost a year and was led by an increase in food produce and aerospace shipments.
Factory sales excluding price changes increased by 0.7 per cent.
The Canadian Dollar was able to consolidate and extend gains against US Dollar thanks to the publication of disappointing US data.
With the Federal Open Market Committee policy meeting looming, every piece of US data is influential and today’s consumer price report showed that inflation continues to be well below the Fed’s target levels.
The US consumer price index climbed by just 0.1 per cent in February. On the year consumer prices were 1.1 per cent higher, less than the 1.2 per cent advance expected.
As quoted by Bloomberg News, the data prompted this response from senior economist Gus Faucher; ‘Firms are reluctant to raise prices, given that demand is still not where we want it to be. The Fed has made it clear that they’re concerned about inflation being too low rather than too high’.
Meanwhile the value of US housing starts unexpectedly fell last month, dipping from 909,000 to 907,000 rather than rising to 910,000 as forecast.
However, there was good news for the US and ‘Greenback’ losses were limited as US building permits surged by 7.7 per cent in February, month-on-month, rather than advancing the 1.6 per cent forecast by economists. January’s monthly decline was positively revised to 4.6 per cent.
Tomorrow’s GBP to CAD exchange rate will primarily be dictated by UK employment figures and the publication of the minutes from the Bank of England’s latest policy meeting. The presentation of the UK budget to Parliament will also have an impact.
Canadian wholesale sales figures could have a modest affect on the pairing during tomorrow’s North American session.
CAD/USD movement meanwhile is likely to be driven by the FOMC policy announcement.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,
,Pound Sterling,0.5461,
Canadian Dollar,,US Dollar,0.9050,
Canadian Dollar,,Euro,0.6516,
Canadian Dollar,,Australian Dollar,0.9915,
Canadian Dollar,,New Zealand Dollar,1.0534,
US Dollar,,Canadian Dollar ,1.1055,
Pound Sterling,,Canadian Dollar,1.8315,
Euro,,Canadian Dollar,1.5366,
Australian Dollar,,Canadian Dollar,1.0085,
New Zealand Dollar,,Canadian Dollar,0.9528,
[/table]
Comments are closed.