Published: 28 Oct at 3 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Canadian Dollar, USA, Canada,
With the Federal Reserveâ€™s two day policy meeting looming and the prospect of tapering becoming increasingly unlikely in the face of disappointing US data, the pressure was lifted from the â€˜Loonieâ€™ today and the commodity-driven asset broke away from a recent run of declines.
The Canadian Dollar might have softened last week, closing the local session lower against the US Dollar, Pound and Euro on Friday, but with a technical indicator signalling that the currencyâ€™s decline had been too rapid the â€˜Loonieâ€™ recovered losses on Monday.
After the Bank of Canada
opted to refrain from hinting at the possibility of future rate increases during last week's policy statement (the first time it has done so for the last two years) the â€˜Loonieâ€™ slumped against its rivals.
Data published this morning showing an increase in UK home prices then served to weaken the CAD/GBP pairing further before North American trading began.
However, according to one Toronto-based foreign exchange expert; â€˜Itâ€™s halted the slide for now. The market is looking at whatâ€™s been happening in the US and theyâ€™re not confident a strong-Dollar policy, or a basis for a strong-dollar environment, is there as long as the Fed is going through all these challenges.â€™
The â€˜Loonieâ€™ was able to extend gains as local trading progressed and US pending home sales and manufacturing production reports failed to match up with estimates.
US manufacturing production gained by 0.1 per cent in September rather than the 0.3 per cent forecast while pending home sales unexpectedly slumped by 5.6 per cent in September, month-on-month, rather than stagnating as expected.
The Canadian Dollar is currently trading against the US Dollar in the region of 0.9574.
While tomorrowâ€™s Canadian industrial product price and raw materials price reports will be of interest, US consumer confidence and retail sales data is likely to have a more significant impact on the â€˜Loonieâ€™.
Of course Canadian GDP data, scheduled for publication on Thursday, will also be particularly influential.
Economists have forecast that the Canadian economy expanded by 0.1 per cent in August, month-on-month, following growth of 0.6 per cent in July.
As of Monday, 28th October 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1706, GBP USD exchange rate was 1.614, and GBP CAD exchange rate was 1.6858.