?Loonie? Tumbles Against ?Greenback? On Stimulus Comments CAD/USD

Published: 21 Nov at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Canadian Dollar, USA, Canada, China,

Today the ‘Loonie’ extended declines against the US Dollar as US initial jobless claims fell by more than forecast, adding to the case for the Federal Reserve tapering stimulus in the first half of next year.

The commodity-driven currency was also feeling the pressure as growth in China’s manufacturing sector slowed by more than forecast, with the HSBC gauge dipping from 50.9 to 50.4 rather than producing the 50.8 reading expected.

Yesterday Bank of Canada Governor Stephen Poloz triggered ‘Loonie’ losses by saying that the central bank would be holding interest rates at current lows until the nation’s economic recovery becomes less patchy and picks up momentum.

As Shaun Osborne observed; ‘Wait and see what happens tomorrow, in the context of what Poloz is saying about inflation, I think the Canadian Dollar is going to be sensitive to weaker numbers. It should be negative for the Canadian Dollar.’

Canadian inflation data is due for release at 13:30. The nation will release its retail sales report at the same time. If sales increase by more than the 0.4 per cent monthly gain expected the Canadian Dollar may be able to end the week on a more positive note.

The CAD/GBP pairing also softened as the Pound was boosted by a gauge of UK factory orders coming in at an 18-year high.

The Canadian Dollar is currently trading against the US Dollar in the region of 0.9529

In other currency news, the Euro pared its advance against the Pound as consumer sentiment in the Eurozone declined unexpectedly. The common currency had rallied earlier in the European session as European Central Bank President Mario Draghi tried to quieten fears regarding the prospect of the central bank implementing negative interest rates.

The Euro is currently trading against the Pound in the region of 0.8341.
As of Thursday, 21st November 2013, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2011, GBP USD exchange rate was 1.6179, GBP CAD exchange rate was 1.702, and GBP CNY exchange rate was 9.8576.

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