On-estimate Canadian retail sales figures helped the ‘Loonie’ recover ground against the Euro this afternoon.
Earlier today the Euro rallied against several of its major currency counterparts as manufacturing/services PMI reports for the currency bloc and its largest economy came in above estimate.
The PMI gauges were over the 50 mark separating growth from contraction and exceeded estimates, reducing the odds of the European Central Bank introducing additional stimulus in the near future.
Shortly after the data were released the Euro advanced on the Pound and US Dollar.
In the opinion of one London-based industry expert, the results were hugely positive ‘and reflective of a broad improvement in Eurozone fundamentals. Euro-Dollar trade looks like it’s desperately trying to break out of this tight trading range to the upside, but is capped by the threat of ECB asset purchases. If that threat is removed, there is a substantial amount of Euro upside momentum that is waiting to be unleashed.’
The Euro consolidated its gains as European trading progressed, but went on to modestly pare its advance against the Canadian Dollar.
The Canadian Dollar has been struggling since before the Easter break, but the news that domestic retail sales increased in February lent the Canadian currency some support.
Domestic retail sales advanced by 0.5 per cent in February, month-on-month, as forecast by economists.
The increase was largely due to a 2.6 per cent jump in the sale of pharmaceutical products, although sales rose in more than half of the 11 retail categories.
While economists had expected the sale of motor vehicles to slip by 0.5 per cent, they actually increased by 0.6 per cent.
However, January’s retail sales gain was negatively revised to 0.9 per cent.
Today’s report appears to indicate that the Bank of Canada was correct when it forecast that the nation’s economy will strengthen gradually.
The appeal of the Canadian Dollar fell dramatically last week as the BOC adopted a neutral stance concerning interest rate movement, and the commodity-driven currency has yet to bounce back fully.
Canadian data is lacking in the run up to the weekend, but tomorrow Euro to CAD fluctuations may occur in response to German IFO business climate and current assessment reports.
Euro (EUR) Exchange Rates
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