The Canadian Dollar resumed its decline against the Euro and hit a four-year low against the US Dollar as investors chose to widely ignore manufacturing sales data which showed that factory sales in the North American nation jumped to a two-year high.
According to Statistics Canada, manufacturing sales rose more than expected in November as factory sales jumped by 1% exceeding economist forecasts for a rise of just 0.3%. In volume terms sales advanced by 0.7%. New factory orders also saw an increase of 1.2% due to an increased demand for machinery, cars and aeroplanes.
Investors have ignored the positive data to instead focus on Wednesday’s Bank of Canada interest rate decision. The Central Bank could go either way with its rate decision but the main consensus is that the Bank’s policy makers will do what they can to keep the currency weak.
“Everyone’s paying attention. The bank’s biggest concern is persistently low inflation, and we expect that will be stressed even more firmly in the statement and the MPR inflation forecast will be downgraded. That dovish tone is also important from a currency perspective,” said a senior economist.
The Canadian Dollar was also under pressure from expectations that the Federal Reserve will choose to continue to taper its monetary easing programme when it gathers for its own policy meeting on January 29. The US Central Bank is expected to reduce the easing programme from $75 billion to $65 billion, a move that will weigh upon commodity and emerging market currencies.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar ,,Euro,0.6734 ,
Canadian Dollar ,, Pound Sterling,0.5534 ,
Canadian Dollar ,,US Dollar,0.9116 ,
Canadian Dollar ,,Australian Dollar,1.0342 ,
Euro ,,Canadian Dollar,1.4850 ,
Pound Sterling,,Canadian Dollar,1.8070 ,
US Dollar ,,Canadian Dollar,1.0968 ,