A lack of economic news for the Eurozone has restrained the Euro’s movement today, but the currency did edge higher against the Canadian Dollar before the close of local trading.
While the Euro continues to derive underlying support from this week’s inflation report, the commodity-driven ‘Loonie’ has spent much of the week in a softer position against its major peers.
As Canada relies heavily on the US for trade, the news that the US economy expanded by considerably less-than-expected caused some weakness in the Canadian Dollar earlier this week.
The appeal of the ‘Loonie’ was also dampened on Thursday by a domestic report showing that the pace of economic growth in Canada slowed in February, easing to 0.2 per cent month-on-month from 0.5 per cent in January.
Overnight investors digested the Federal Open Market Committee’s pessimistic policy announcement and the Canadian Dollar briefly advanced on a struggling ‘Greenback’.
However, on Friday the ‘Loonie’ consolidated declines against peers like the Euro following the publication of Canadian manufacturing data.
The Euro to Canadian Dollar exchange rate (EUR/CAD) is currently around 1.5225.
The Royal Bank of Canada measure remained above the 50 mark separating growth from contraction but edged from 53.3 to 52.9 in April.
The decline in manufacturing output was partly due to the adverse winter weather, and there are hopes that the US economic recovery and the weaker ‘Loonie’ will help the Canadian export market recover.
Today’s report indicated that employment in the manufacturing sector is rising and the level of new business is improving.
Canada’s manufacturing PMI has provided a growth reading for the last 13 months.
In the view of one industry expert; ‘April’s survey highlights that the manufacturing sector is experiencing improving business conditions, although output growth moderated slightly since the previous month. Exchange rate depreciation has helped support export sales, but higher import prices are pushing up cost burdens, while adverse weather conditions and logistics bottlenecks have placed pressure on supply chains in recent months.’
With no further Canadian data scheduled for release until tomorrow, any volatility in the EUR/CAD pairing before the weekend will be the result of manufacturing and employment figures for the Eurozone. The Eurozone’s unemployment rate is expected to hold at 11.9 per cent in March.
Manufacturing PMI for the currency bloc is expected to confirm a previous estimate of 53.3 for April.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
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Euro,
Euro,
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