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Canadian Dollar (CAD) Sinks as the Bank of Canada Slashes Interest Rates

Published: 4 Mar at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, France, Germany, Italy,

Pound Sterling (GBP)

The Pound (GBP) struggled against many of its peers today after the UK Markit Services PMI for February undercut forecasts and eased from 53.3 to 53.2.

The GBP exchange rate has also become beset by rising odds of a rate cut from the Bank of England (BoE), with the coronavirus outbreak threatening to weaken the British economy in the near-term.

US Dollar (USD)

The US Dollar (USD) recovered some of its losses today after February’s ISM Non-Manufacturing PMI beat forecasts and rose from 55.5 to 57.3. As a result, the US economic outlook has continued to brighten, with the services sector remaining strong last month.

However, the US economy is also set to be affected by the global coronavirus. Any further signs that the world’s largest economy could suffer would weaken market appeal of the ‘Greenback’.

Euro (EUR)

The Euro (EUR) has continued to struggle today with Germany’s Markit PMI Composite for February sinking below forecasts to 50.7, and causing some alarm for single currency traders as the Eurozone’s largest economy continues to lean towards a recession.

The European Central Bank (ECB) is also increasingly expected to slash its interest rates, with Italy’s and France’s economy likely to see a recession amid growing concerns over the spread of COVID-19.

Australian Dollar (AUD)

The Australian Dollar (AUD) gained on a return of risk-appetite today as the US economy continues to stumble following the surprise Fed interest rate cut.

Today also saw the Australian growth gauge for the fourth-quarter beat forecasts, with the quarterly figure rising by 0.5% and providing some hope for the Australian economy in 2020.

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) has benefited from returning risk-sentiment after the US Federal Reserve announced an emergency rate cut amid growing fears that the coronavirus outbreak could negatively impact the world’s largest economy.

However, as China is New Zealand’s largest trading partner, we’re likely to see the ‘Kiwi’s gains being short-lived as the Chinese economy is also likely to be heavily impacted by the outbreak in the first-quarter.

Canadian Dollar (CAD)

The Canadian Dollar (CAD) fell against many of its peers today after the Bank of Canada (BoC) slashed its interest rates from 1.75% to 1.25%, leaving many ‘Loonie’ traders concerned for the health of the Canadian economy going forward.

Fears continue to grow over the global coronavirus outbreak having a negative impact on Canada’s global trade-reliant economy. As a result, CAD is expected to remain subdued throughout the rest of the week.

As of Wednesday, 4th March 2020, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1557, GBP USD exchange rate was 1.2873, GBP AUD exchange rate was 1.943, GBP NZD exchange rate was 2.0437, GBP CAD exchange rate was 1.7229, and GBP CNY exchange rate was 8.916.
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