The ‘Loonie’s response to yesterday’s Bank of Canada rate decision was fairly lacklustre.
The neutral stance saw the Canadian Dollar post modest gains against rivals like the US Dollar, but any advance was limited ahead of Friday’s influential employment reports.
Today however the CAD/USD pairing was able to extend gains as Canada’s Ivey Purchasing Managers Index rose unexpectedly and US factory orders slumped.
While the ‘Loonie’ advanced against some of its rivals on Thursday, it failed to gain on the Euro as the common currency adopted a bullish stance following the European Central Bank’s rate decision.
As expected by the majority of economists, the ECB opted to leave interest rates unchanged.
The central bank also positively revised growth forecasts and the currency bloc’s inflation outlook.
In the immediate aftermath of the decision the Euro broadly strengthened.
When speaking to reporters ECB President Mario Draghi stated; ‘The news that has come out since the last monetary policy meeting are by and large on the positive side. […] We have taken and are still taking early decisive action on the monetary policy front. Incoming information confirms that the moderate recovery of the euro area economy is proceeding in line with our previous assessment.’
The Euro achieved a two-month high against the US Dollar and advanced on peers like the Pound and Canadian Dollar.
Tomorrow further EUR/CAD movement may occur in response to German industrial production data and Canadian employment figures.
Industrial production in the Eurozone’s largest economy is expected to have climbed by 0.8 per cent in January, month-on-month – wiping out December’s 0.6 per cent decline.
Economists have forecast that the Canadian economy added 16,800 employees in February, with the nation’s unemployment rate holding at 6.6 per cent.
Last month the nation’s employment figures surprised to the upside. Another unexpected result could cause volatility.
Of course the US non-farm payrolls report is likely to have a notable impact on the market.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,British Pound,0.8280 ,
Euro,,New Zealand Dollar,1.6330, ,Canadian Dollar,1.5211 ,