After plunging to multi-month and multi-year lows against almost all of its major currency rivals in the aftermath of last week’s surprising Canadian employment figures, the ‘Loonie’ enjoyed a modest rebound yesterday as commodity prices climbed.
The Canadian Dollar advanced on the Euro as the appeal of the common currency was slightly dented by a report for Germany which showed that growth in the Eurozone’s largest economy probably cooled in the final quarter of the year.
The ‘Loonie’ has since experienced moderate fluctuations and is trading in a fairly tight range against the Euro.
Today’s final consumer price index data for the Eurozone and its largest economy had little impact on the EUR/CAD pairing.
During European trading the Euro was little affected by reports confirming the pace of inflation in the Eurozone and Germany, but did ease slightly lower as a result of the European Central Bank’s monthly report.
The report reiterated the central bank’s commitment to keeping policy accommodative for as long as necessary.
Euro to Canadian Dollar (EUR/CAD) exchange rate edged lower today.
While the Canadian Dollar has clawed back some losses against its currency counterparts over the last 24 hours, industry experts have been lauding the weakness in the commodity-driven asset and forecasting how it could benefit the Canadian economy as a whole.
Since the start of 2014, which was only just over two weeks ago, the Canadian Dollar has fallen by 3 per cent against the US Dollar.
The Bank of Montreal has now released a report which states that this drop, when viewed in conjunction with last year’s declines, could boost economic growth by 1.5 per cent over the next two years.
The Bank of Montreal report stressed; ‘The beleaguered manufacturing and domestic tourism sectors will find the biggest relief from the weaker currency. Even some retailers will be breathing a tad easier, as the loud siren call of cross-border shopping fades for consumers with each tick down of the currency’.
If this estimation proves accurate it might reduce the odds of the Bank of Canada having to introduce a rate cut if economic data doesn’t improve.
Tomorrow EUR/CAD movement could occur in response to Eurozone construction output data.
If construction output in the currency bloc improved in November and boosts the Euro, the Canadian Dollar is forecast to shed its modest gain before the weekend.
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,0.8333 ,
Euro,,New Zealand Dollar,1.6406 ,
Euro,,Canadian Dollar,1.4857 ,