As investors lost their appetite for the Euro on Thursday, the common currency fell against rivals like the Canadian Dollar.
The Euro also softened against almost all of its other major peers as the day’s disappointing growth reports for the Eurozone took a toll.
The fact that the Eurozone’s economy expanded by half the amount expected in the first quarter of the year added to the case for the European Central Bank revising stimulus in June.
Although Germany displayed stronger-than-anticipated economic expansion in the first quarter, the situation was less encouraging in France, Italy and Portugal.
Several recent remarks from ECB officials have also indicated that stimulus is on the horizon.
Currency strategist Kiran Kowshik asserted; ‘Since last week there’s been a number of comments suggesting the ECB are open to more easing measures if need be. Markets were surprised by how dovish Draghi was. The Euro is getting hit because investor positioning has been largely neutral in recent months and is catching up.’
The Euro to Canadian Dollar exchange rate is currently trading around 1.4849.
After reports showed that the Eurozone’s economy expanded by just 0.2 per cent in the first three months of the year (due to ongoing weakness in nations like France, Portugal and Italy) the Euro dropped to an 11-week low against the US Dollar.
The common currency also reversed gains against the Pound and slipped against peers like the ‘Loonie’ over the course of European trading.
Meanwhile, the Canadian Dollar was supported on Thursday as a measure of domestic factory sales climbed to its highest level since 2008.
Finally, after two years of stagnation, it appears that factory sales are on the up.
Sales climbed by 0.4 per cent in March, month-on-month, instead of declining the 0.3 per cent expected.
April’s sales gain was positively revised to 1.5 per cent, making it six sales gains in seven months.
Sales of machinery climbed by 3.3 per cent while food sales climbed by 2.1 per cent.
According to economist Krishen Rangasamy; ‘The Canadian factory report was a bit better than expected, and the volume gains should be supportive of March GDP.’
A separate Canadian report revealed that existing home sales climbed by 2.7 per cent in April, month-on-month, following a 1.0 per cent increase in March.
Before the weekend additional fluctuations in the Euro to CAD pairing could occur as a result of Eurozone trade balance figures and Canada’s international securities transactions report.
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,1.5773, ,Canadian Dollar,1.4849 ,