The Euro to CAD pairing held declines on Friday and looks set to remain trading in a softer position into the weekend.
Yesterday the Euro declined against the Canadian Dollar following the release of surprisingly upbeat Canadian manufacturing shipments and existing home sales figures.
The 0.4 per cent increase in manufacturing shipments defied expectations for a 0.3 per cent decline and was preceded by a positively revised increase of 1.5 per cent in February.
The surprisingly strong result was well received by investors.
However, economist David Madani said this of the result; ‘The persistent underlying weakness in manufacturing sales volumes still suggests that hopes for a pickup in overall economic growth remain overly optimistic. Given the high export-intensity of the manufacturing sector, it still seems that the export-led recovery is a long way off’.
Despite this pessimistic view, the Canadian Dollar was buoyed by the data and the commodity-driven currency advanced on the Euro.
The Euro, meanwhile, remained under pressure as a result of yesterday’s concerning Eurozone growth data and the expectation that the European Central Bank will have no choice but to introduce additional easing measures in June.
The Eurozone was expected to post growth of 0.4 per cent in the first quarter of the year but it only expanded by 0.2 per cent.
On Friday speculation surrounding the ECB’s next policy meeting saw investors selling peripheral government bonds and the Euro edged lower against several of its most traded currency counterparts.
The Canadian Dollar was little changed against the US Dollar as commodities put in a mixed performance and investors digested several influential US reports.
The price of crude oil, one of Canada’s major exports, climbed by 33 cents while copper advanced by a cent.
Although US housing reports were upbeat, the nation’s consumer confidence index unexpectedly declined from 84.1 to 81.8 in May.
Next week volatility in the EUR/CAD pairing could occur as a result of Canada’s wholesale sales figures, retail sales data and consumer price index.
Canada’s retail sales climbed by 0.5 per cent in February, month-on-month, so investors will be hoping for another good advance.
Of course Eurozone data, including Markit services/manufacturing PMI, could also have an impact on the Euro to Canadian Dollar exchange rate.
Euro (EUR) Exchange Rates
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