Over the course of local trading a lack of pertinent economic news for the Eurozone kept the Euro trading in a fairly narrow range against its major currency rivals.
However, the common currency was able to advance on the ‘Loonie’ during the North American session as a result of lacklustre Canadian data.
The news that retail sales fell by 1.8 per cent in December, month-on-month, pushed the Canadian Dollar lower against peers like the Euro and ‘Greenback’.
However, ‘Loonie’ losses were a little limited as a separate report showed acceleration in Canada’s inflation rate.
The Bank of Canada has warned of the risks posed by slow inflation on several occasions, so the comparatively strong increase in the nation’s consumer price index came as a surprise.
Consumer prices climbed by 1.5 per cent in January, year-on-year, rather than increasing by 1.3 per cent as forecast by economists.
On the month, consumer prices were 0.3 per cent higher in January following a decline of 0.2 per cent in December. Economists had expected a 0.1 per cent month-on-month gain.
The pace of the increase in inflation was the most rapid for over a year, but inflation still remains well below the BOC’s 2 per cent target.
The jump in consumer prices was also primarily seasonal, as heating costs climbed during a difficult winter.
While Canada’s retail sales figure saw the Canadian Dollar decline, the currency pared losses as a result of the inflation report.
Next week the major Canadian data to be aware of, GDP figures for December and the fourth quarter of 2013, isn’t due for release until Friday.
Before then ‘Loonie’ movement may be a little limited, although with a stream of data for the Eurozone appearing throughout the week, EUR/CAD fluctuations can be expected.
Investors will be watching out for Monday’s German IFO business climate/current assessment measures and Eurozone inflation data, Tuesday’s German GDP, Wednesday’s German GfK consumer confidence survey, Thursday’s German unemployment report and Friday’s German retail sales figures.
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,0.8221 ,
Euro,,New Zealand Dollar,1.6574,,Canadian Dollar,1.5276 ,