As Monday progressed the Canadian Dollar was trading in a fairly narrow range against the Euro following last week’s more volatile trading.
At the beginning of last week Bank of Canada Governor Stephen Poloz delivered some fairly pessimistic remarks concerning the performance of the Canadian economy. He also confirmed that the BOC intends to stick with its comparatively neutral policy stance, a factor which put pressure on the commodity-driven currency.
However, on Friday the Canadian Dollar did claw back some losses thanks to a surprising surge in domestic retail sales, but the different approaches being adopted by the BOC and Federal Reserve limited ‘Loonie’ gains.
In the opinion of currency strategists with TD Securities; ‘We think the low domestic inflation/sluggish growth outlook for Canada will continue to contrast somewhat at least with the improving underlying fundamentals in the USD and keep a firm bid under USD/CAD.’
A complete lack of economic data for Canada is likely to restrain ‘Loonie’ movement over the next few days, though Eurozone reports did help the Canadian Dollar strengthen against the Euro.
The Euro edged lower against almost all of its most traded currency counterparts as manufacturing/services PMI data for the Eurozone and its largest economy fell short of forecasts.
While the French services and manufacturing sectors unexpectedly returned to growth this month, the Eurozone as a whole posted a composite PMI of 53.2 in March, slightly less than the 53.3 forecast.
Germany’s flash composite index also came in at a three-month low.
In a statement published with the figures Markit economist Oliver Kolodseike noted; ‘Germany’s private sector economy continued to grow at a robust pace at the end of the first quarter. Although the rate of expansion in activity eased to a three month low, growth in the three months to March was the joint strongest since mid-2011.’
Concerns that price pressures in the Eurozone might force the European Central Bank into introducing additional stimulus also took a toll on the Euro on Monday.
Tomorrow the Euro to CAD exchange rate could experience volatility as a result of German IFO business climate, current assessment and expectations reports.
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,0.8360 ,
Euro,,New Zealand Dollar,1.6116,
Euro,,Canadian Dollar,1.5443 ,