A lack of Canadian data might have limited ‘Loonie’ movement on Tuesday but the commodity-driven currency was still enjoying a stronger relationship with its European rival.
The Euro to CAD pairing eased lower as the Euro lost appeal in the wake of less-than-impressive sentiment data for the Eurozone’s largest economy.
The ZEW current situation survey for Germany rose from 59.5 in April to 62.1 in May, but the gauge of economic sentiment plunged from 43.2 to 33.1 in its fifth consecutive monthly decline.
The Eurozone’s economic sentiment index edged from 61.2 to 55.2.
As a consequence of the report, the Euro pared earlier gains against the Pound, fell to a five-week low against the US Dollar and weakened against the Canadian Dollar.
Declines in the common currency were also inspired by a report which cited Bundesbank (Germany’s central bank) as voicing its support for future fiscal stimulus from the European Central Bank. In an article featured in the Wall Street Journal, Bundesbank chief Jens Weidmann commented that he’s prepared to cut rates if needed.
According to currency strategist Manuel Oliveri; ‘The Euro is falling on a report that Weidmann is saying he’s ready to cut rates if needed. There’s a lot of focus on Weidmann because, as the Bundesbank President, he’s on the least dovish side when it comes to the ECB. This is supporting the notion that there’s a quite high probability of the ECB acting next month.’
Although there were no Canadian economic reports today, figures compiled by Bloomberg News showed that Canadian consumer confidence is in a holding pattern on Monday. The news agency’s Nanos Confidence Index came in at 59.5 for the week ending May 9th. The previous reading stood at 59.6.
While consumer sentiment waned in Quebec and Ontario, it increased in British Columbia and the Prairies as Canadian residents weighed up the impact of a resilient housing market and flagging employment sector.
Tomorrow movement in the Euro to Canadian Dollar pairing may follow the release of final inflation data for Germany and industrial production figures for the Eurozone.
Industrial production in the 18-nation currency bloc is expected to have declined by 0.3 per cent in March, month-on-month – wiping out the 0.2 per cent monthly advance recorded in February.
If production does decline the Canadian Dollar could consolidate and extend gains against the Euro.
Canada’s Teranet/National Bank HPI for April will also be of interest.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.5867, img src=”http://www.euroexchangeratenews.com/wp-content/themes/eern/images/arrow-down.gif”/>
Euro,,Canadian Dollar,1.4935 ,