The Euro to CAD exchange rate softened on Thursday afternoon after a report showed that Canada’s current account deficit fell narrowed to its lowest amount since the end of 2011 in the first quarter of the year.
According to a report released by Statistics Canada, the North American nation’s current account deficit narrowed to a seasonally adjusted figure of $C12.4 billion in the first quarter from the previous figure of $C15.6 billion.
An increase in foreign currency deposits placed by non-residents of Canada was seen as one of the main reasons for the narrowing of the deficit.
Economists had been forecasting that the deficit would narrow to $C13.0 billion.
Since 2008 Canada has posted deficits due to the large hit to exports in the wake of the global financial crisis.
The deficit reached its widest point in the third quarter of 2010 with a figure of $C19.6 billion.
Following the release of the data the Canadian Dollar advanced to a session high against its US counterpart.
The ‘Greenback’ meanwhile softened against the Euro and other peers after data showed that the world’s largest economy contracted in the first quarter of the year.
The fall was the first recorded since the first quarter of 2011 and cast doubts over the strength of the economy.
The Euro meanwhile remains under pressure from increasing expectations that the European Central Bank will introduce new monetary easing measures at next week’s eagerly anticipated policy meeting.
The Canadian Dollar is likely to see further movement on Friday due to the release of the latest PPI and GDP data.
Analysts are expecting the nation’s annual rate of growth to have fallen to 2% in the first quarter, down from the 2.9% recorded in the final quarter of 2013.
Euro Exchange Rate News:
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