The Euro softened against the Canadian Dollar on Thursday afternoon after the North American currency found support from a report which showed that Canada’s current account deficit widened less-than-expected in the fourth-quarter of 2013.
The Euro meanwhile was under pressure from the release of disappointing German inflation data which added to growing concerns that the European Central Bank will announce new stimulus measures at next week’s policy meeting. If Friday’s Eurozone inflation report disappoints then we can expect the ECB to take action to stave off deflation.
The report showed that Germany’s consumer price inflation eased this month, defying expectations that the rate would stabilise. The consumer price index rose by 1.2% down from the forecast figure of 1.3%.
The current account report released by Statistics Canada showed that the North American nation’s current account deficit widened to a seasonally adjusted figure of C$16 billion in the final quarter of 2013, up from the C$14.8 billion seen in the third quarter. Economists had been expecting the deficit to have widened by C$17 billion in the fourth quarter.
According to the data, the deficit in the trade of goods widened to C$2.75 billion from the previous quarter’s C$1.36 billion gap. Exports dropped due to a price fall in the value of crude oil and a reduction in the number of Canadian precious metals shipped abroad. Imports meanwhile grew to C$122.86 billion, on purchases of consumer goods, such as food products and pharmaceuticals, and transport equipment.
The EUR/CAD currency pair is likely to experience volatility as both the Eurozone and Canada see the release of important data. Eurozone inflation data and Canadian GDP reports are both likely to impact the pairing.
Euro (EUR) Exchange Rates
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