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Canadian Dollar (CAD) Fell by 0.9% as Domestic Growth Slowed
Published: 31 Oct at 4 PM Tags: Pound Sterling, Dollar Exchange Rate, Currency Exchange, Canadian Dollar Exchange Rate, UK, Exchange Rates, Economy,
Weaker Canadian Dollar Good for Exporters
The Canadian Dollar (CAD) exchange rate fell against almost all of its currency counterparts following the release of disappointing local growth figures. The commodity-driven currency had previously softened on the back of comments from Bank of Canada Governor Stephen Poloz. As well as stating that the decline in oil prices might have a detrimental impact on Canada’s growth forecasts for 2015, Poloz commented that the depreciation in the local currency was a boon to Canadian exporters, going so far as to describe the situation as the ‘icing on the cake’.
Canadian GDP Forecasts Revised
After the publication of Canada’s GDP figures for August, the Canadian Dollar extended declines, falling by 0.9% against the US Dollar and losing over 0.7% against the Pound. The nation’s economy had been expected to stagnate in August on a monthly basis but it actually contracted by -0.1%. This took the annual pace of expansion from 2.5% to 2.2% - worse than the forecast declination to 2.3%. The data highlights the diverging outlooks of the US and Canada and makes it increasingly likely that the Federal Reserve will hike interest rates long before the Bank of Canada. In the view of currency strategist Jane Foley; ‘The market’s been betting on who is going to be hiking first and what’s going to be the difference between them. Today the ‘Loonie’ has weakened because of the weaker Canada data, which suggests that maybe the Bank of Canada will be going after the Fed.’ Earlier this week data showed a stronger-than-forecast rate of quarterly growth in the US. The US economy expanded by 3.5% in the third quarter, down from growth of 4.6% in the second quarter but defying expectations for a weaker reading of 3.0%.
CAD Movement to be Inspired by Employment Stats
Next week the Canadian reports most likely to cause Canadian Dollar (CAD) movement include the nation’s RBC Manufacturing PMI, International Merchandise Trade figures, Building Permits report, Ivey Purchasing Managers Index and employment statistics for October. In September Canada’s unemployment rate came in at 6.8% as the economy added 74,100 positions. A strong employment gain or a fall in the headline unemployment rate would be beneficial for the ‘Loonie’. Of course, the highly influential US non-farm payrolls report (out on Friday) will also have an impact on the Canadian Dollar.
The Canadian Dollar (CAD) exchange rate fell against almost all of its currency counterparts following the release of disappointing local growth figures. The commodity-driven currency had previously softened on the back of comments from Bank of Canada Governor Stephen Poloz. As well as stating that the decline in oil prices might have a detrimental impact on Canada’s growth forecasts for 2015, Poloz commented that the depreciation in the local currency was a boon to Canadian exporters, going so far as to describe the situation as the ‘icing on the cake’.
Canadian GDP Forecasts Revised
After the publication of Canada’s GDP figures for August, the Canadian Dollar extended declines, falling by 0.9% against the US Dollar and losing over 0.7% against the Pound. The nation’s economy had been expected to stagnate in August on a monthly basis but it actually contracted by -0.1%. This took the annual pace of expansion from 2.5% to 2.2% - worse than the forecast declination to 2.3%. The data highlights the diverging outlooks of the US and Canada and makes it increasingly likely that the Federal Reserve will hike interest rates long before the Bank of Canada. In the view of currency strategist Jane Foley; ‘The market’s been betting on who is going to be hiking first and what’s going to be the difference between them. Today the ‘Loonie’ has weakened because of the weaker Canada data, which suggests that maybe the Bank of Canada will be going after the Fed.’ Earlier this week data showed a stronger-than-forecast rate of quarterly growth in the US. The US economy expanded by 3.5% in the third quarter, down from growth of 4.6% in the second quarter but defying expectations for a weaker reading of 3.0%.
CAD Movement to be Inspired by Employment Stats
Next week the Canadian reports most likely to cause Canadian Dollar (CAD) movement include the nation’s RBC Manufacturing PMI, International Merchandise Trade figures, Building Permits report, Ivey Purchasing Managers Index and employment statistics for October. In September Canada’s unemployment rate came in at 6.8% as the economy added 74,100 positions. A strong employment gain or a fall in the headline unemployment rate would be beneficial for the ‘Loonie’. Of course, the highly influential US non-farm payrolls report (out on Friday) will also have an impact on the Canadian Dollar.
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Source: moneytransfer.co.uk