Overnight rising crude oil prices helped the commodity-driven Canadian Dollar recover losses against the Pound and edge away from a three-year low against its US counterpart.
The CAD/GBP pairing was also able to advance as Sterling was stumped by a surprising decline in UK consumer confidence and a report showing a widening in the UK’s budget deficit.
However, the ‘Loonie’s show of strength was short lived and the asset went on to tumble against almost all of its major rivals in response to disappointing domestic inflation figures.
Before the inflation report was published a Toronto-based forex expert intimated that the Canadian Dollar’s gains were liable to be short lived, particularly as the Bank of Canada has intimated that it would prefer a weaker domestic currency.
While economists expected Canada’s consumer price index to advance by 1 per cent in November from a year previously it actually only climbed by 0.9 per cent, staying well below the BOC target and making it increasingly likely that the Bank of Canada will have to hold interest rates lower for longer.
The Canadian Dollar’s decline against the US Dollar was exacerbated by a strong GDP report for the world’s largest economy.
In response to the data currency strategist Greg T. Moore stated; ‘It’s a notable weakness in the inflation report and strong US GDP – you should expect to see mid-cycle lows for the CAD on this type of result. We’ve always expected the US Dollar to go higher, but now those moves will be advanced.’
As the BOC has voiced its inflation concerns in recent weeks and intimated that interest rates will be held at current lows until the situation improves this result is likely to keep pressure on the ‘Loonie’ in the days ahead.
Current Canadian Dollar (CAD) Exchange Rates:
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The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9354 <
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.6826 <
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5710 <
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0482 <
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.1485 >
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.7519 >
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0700 >
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.4632 >
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8732 >
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9538 >
(Correct as of 16:20 GMT)
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