The Euro to Canadian Dollar exchange rate strengthened on Wednesday after a report showed that Eurozone inflation increased in April, lessening the pressure on the European Central Bank to introduce monetary easing measures at next week’s policy meeting.
The ‘Loonie’ fell against the Euro and other major peers despite the release of data which showed that the Canadian economy expanded for a second consecutive month in February. The economy was bolstered by gains for commodities such as copper miners and oil producers and manufacturers.
According to Statistics Canada the nations GDP expanded by 0.2% in February to an annualised C$1.61 trillion.
Mining, quarrying and oil extraction all increased in the February but factory output eased from the 1.6% seen in January to 0.6% in February.
Despite the rise in GDP the ‘Loonie’ was unable to make ground against any of its major peers. Instead it fell as investors widely ignored the GDP data to turn their attention to the evening’s upcoming US Federal Reserve policy statement. The Federal Reserve is not expected to alter its policy and is expected to continuing tapering its monthly bond buying programme.
The Euro meanwhile strengthened against the Canadian Dollar, Pound Sterling and US Dollar after data released earlier in the session showed that the Eurozone’s annual rate of inflation increased from 0.5% in March to 0.7% in April.
Economists are expecting the rise to be enough to ease pressure on the ECB to take measures to tackle the threat of low inflation. Economists concerns that the Central Bank could introduce negative interest rates or quantitative easing at next week’s policy meeting eased, aiding the Euro.
Euro (EUR) Exchange Rates
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