Where will the CAD be against the US dollar, euro and British pound this week?
May 11, 2016
- Canadian dollar exchange rates remain soft versus the majority of currency peers.
- The GBP/CAD exchange rate has succeeded in climbing 0.25 per cent today.
- Forecasts eye Thursday's BoE inflation report.
In spite of a recent rise in oil prices, the Canadian dollar exchange rates have remained soft against currency peers today.
The value of the CAD exchange rates has once again been called into question today, owing to the continual negative impact of the as-yet uncontained Alberta wildfires.
In a more positive development, the price of crude oil on the WTI index has risen supportively.
Commodity-correlated currencies such as the Canadian dollar (CAD) have remained under pressure in spite of China’s Consumer Price Index holding steady on the year at 2.3%.
Ahead of Thursday’s Canadian New Housing Price Index sentiment towards the CAD rates is likely to remain primarily tied to the volatile price of oil.
The Canadian dollar has generally failed to restore themselves against peers today owing to a lack of resolution in Alberta.
With the western Canadian wildfires continuing to burn, oil production and transportation in the region has been severely limited.
With the worst estimates putting a burn time of up to a year, it remains to be seen how soon vital economic operations in Alberta will be able to get back up and running.
Latest Pound/Canadian Dollar Exchange Rates
- On Wednesday the Pound to Canadian Dollar exchange rate (GBP/CAD) converts at 1.86
- At time of writing the canadian dollar to pound exchange rate is quoted at 0.538.
- At time of writing the canadian dollar to euro exchange rate is quoted at 0.68.
- At time of writing the canadian dollar to us dollar exchange rate is quoted at 0.777.
After sliding against both the Pound (GBP) and US Dollar (USD) last week amid fears of the impact of the Alberta wildfires on the Canadian economy, the Canadian Dollar (CAD) exchange rates remained close to multi-week lows following the publication of domestic housing starts data.
According to CTV news, "The pace of Canadian housing starts slowed in April to the lowest level in three months. Most regions of the country saw increases in urban areas on a seasonally adjusted basis but there were declines in Ontario and Quebec. Canada Mortgage and Housing Corp. says the seasonally adjusted rate for housing starts last month was 191,512 units -- down from 202,375 units in March and 212,594 units in February."
After the report was published the CAD/GBP exchange rate was trending in the region of 0.5349, down 0.35% on the day’s opening levels, while the CAD/USD exchange rate dropped over 0.5% to 0.7707.
The most significant headwinds for Canadian Dollar exchange rates came from a record-high trade deficit in March, caused by a -4.8% drop in exports after February’s -6.6% drop.
Although Friday’s unemployment rate revealed joblessness levels had held steady, rather than creeping up to 7.2%, news that key oil-producing region Alberta continued to struggle soured the positive figure.
According to Thomson Reuters, "The Canadian labour market stalled in April, leaving the unemployment rate unchanged at 7.1 percent, while job losses in Alberta showed the province was continuing to struggle with the fallout of cheaper oil."
Foreign Exchange Market Sentiment to Drive Canadian Dollar Exchange Rate Movement This Week
Sentiment is likely to drive Canadian Dollar (CAD) exchange rates over the coming week, especially considering the huge impact a raging wildfire has had on oil production.
The coming week is a quiet one in terms of data for Canada, making it highly likely that oilmarket fluctuations will drive CAD/GBP and CAD/USD movement.
However, a public appearance from the Bank of Canada’s (BOC) Deputy Governor Carolyn Wilkins could provide some direction for investors, who are uncertain over the central bank’s monetary policy outlook.
Today’s data consists entirely of the Canadian housing starts figure, with Thomson Reuters noting; ‘A report from the Canadian Mortgage and Housing Corp is expected to show that the seasonally adjusted annualized rate of housing starts fell to 191,500 units in April from 204,251 in March.’
Weakening the short-term outlook for Alberta - and Canada’s oil industry - over the last week was a raging wildfire, which forced over 100,000 residents to evacuate, destroyed at least 1,600 homes and cut oil production by an estimated 800,000 barrels per day.
The fire, thought to be Canada’s most expensive natural disaster in history, has already caused billions of Dollars’ worth of damage and could take several months to fully brought under control.