While European news was fairly limited today the Euro was able to advance on a pressured Canadian Dollar.
Investors turned from the ‘Loonie’ in response to yesterday’s dovish comments from the Bank of Canada and the commodity-driven currency fell further still following the surprise resignation of Canada’s Finance Minister Jim Flaherty.
While delivering a speech in Halifax BOC Governor Stephen Poloz asserted; ‘The global economy may not be just suffering through a hangover from the financial crisis. There are other, longer-term forces at work as well. Once specific consequences would be that even extraordinarily low policy interest rates could prove to be less simulative than in normal circumstances.’
The Canadian Dollar plummeted following these gloomy comments.
The news that the divergent views on policy held by Flaherty and Prime Minister Stephen Harper led to Flaherty’s resignation pushed the Canadian Dollar below 90 US cents and saw the Euro to CAD pairing fall.
Meanwhile, earlier today the Euro was supported by the news that Eurozone construction output increased by 1.5 per cent in January, month-on-month.
This was up from a monthly gain of 1.3 per cent in January.
Output was up 8.8 per cent on the year.
The highest construction output increases were recorded in Slovenia, Spain, Hungary and Germany. Portugal was responsible for the sharpest decrease.
The Eurostat data confirms that the Eurozone’s construction sector had an upbeat start to 2014 after 2013’s trend for declining output.
As the North American session progressed the Canadian Dollar approached a six-week high against the US Dollar.
With the Federal Open Market Committee’s policy announcement drawing ever closer, additional currency market volatility is likely to occur before the close of trading.
Tomorrow Euro to Canadian Dollar exchange rate movement may be triggered by German producer price figures.
Of course Friday’s inflation report for Canada is also likely to have a considerable impact.
Euro (EUR) Exchange Rates
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