The Euro to CAD exchange rate edged above 1.51 cents during European trading despite the Euro being fairly range-bound ahead of tomorrow’s German inflation figures.
The Canadian Dollar hit a three-month high against the US Dollar yesterday as the likelihood of the US central bank increasing interest rates declined and investors focused on the fact that much of Canada’s economic data has trumped expectations this month.
The ‘Loonie’ was also slightly higher against peers like the Pound and Euro.
Yesterday strategist David Doyle said of the Canadian Dollar’s movement; ‘Sentiment reached an extreme in that positions were overly negative, and you’ve had a bit of better data in the last few weeks. The FOMC minutes have largely been interpreted as signalling rate hikes could be further out.’
However, with the price of Brent crude oil dropping the commodity-driven Canadian Dollar came under pressure on Thursday.
Furthermore, the Euro has spent the day holding steady against its peers even as French inflation figures and industrial production data came in below forecast levels.
Although a Bloomberg News Survey envisages the European Central Bank introducing a rate cut by June of this year, the Euro isn’t quite feeling the heat yet and was able to gain on the US Dollar following the dovish FOMC meeting minutes.
The EUR/USD pairing retraced some of its steps this afternoon as the ‘Greenback’ was boosted by better-than-forecast US initial jobless claims data.
The Canadian Dollar was little affected by the publication of Canada’s new housing price index.
Canada’s new housing price index advanced by 0.2 per cent in February, month-on-month, slightly higher than the 0.1 per cent gain expected.
On the year the Canadian new housing price index was up 1.5 per cent, unchanged from January.
The increase in new homes was led by a 0.9 per cent jump in Calgary.
This report follows Tuesday’s disappointing Canadian building permits and housing starts data.
Before the weekend further Euro to Canadian Dollar fluctuations may occur in response to Germany’s inflation data and the US University of Michigan Confidence index.
Next week the Canadian economic reports to be aware of include manufacturing shipments, existing home sales, the Bank of Canada rate decision and Canadian inflation figures.
Euro (EUR) Exchange Rates
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