SendMoney.org.uk

Compare exchange rates, send money abroad and online

Sat 21 Dec 2024 16:07GMT

Canadian Dollar (CAD) Benefits as BoC Effectively Rules Out Negative Interest Rates

Published: 22 Jun at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany,

Pound (GBP)


The Pound (GBP) edged higher against many of its peers today after it was reported that Prime Minister Boris Johnson would more-than-likely ease social distancing guidelines on Tuesday.

As a result, Sterling has benefited from growing hopes for its economy, with relaxed guidelines likely to improve the economy’s performance in the months ahead.

However, today saw the UK’s factory orders fall to record lows, which has left some GBP investors increasingly jittery about the nation’s industrial and manufacturing sector’s recovery.

Euro (EUR)


The Euro (EUR) benefited from a sell-off of its biggest competitor, the US Dollar, after Deutsche Bank said that the ‘Greenback’s safe-haven appeal had eased in recent weeks over fears for America’s exit strategy from the coronavirus crisis.

Consequently, the single currency has absorbed some of the gains from its own safe-haven status. This follows China’s reiteration that it would honour the US-China phase one trade agreement going forward.

Meanwhile, today saw the release of the Eurozone’s consumer confidence gauge for June edge higher from -18.8 to -14.7. However, with the gauge still in negative territory, this failed to benefit the single currency.

US Dollar (USD)


The US Dollar (USD) struggled today after risk-sentiment improved following Beijing’s commitment to the US-China trade agreement. The safe-haven ‘Greenback’ has suffered as a result, with investors flocking to riskier assets and the Euro instead.

Today also saw the release of the Chicago Fed National Activity Index improve from -17.89 to 2.61. Nevertheless, this weighed on USD as investors continue to flock to riskier currencies as the American economy shows slow stages of recovery.

Canadian Dollar (CAD)


The Canadian Dollar (CAD) benefited from the Bank of Canada’s (BoC) effective ruling out of negative interest rates today.

However, with oil prices continuing to dwindle today, the oil-sensitive ‘Loonie’s gains have been held back for growing fears over Canada’s largest export. Any further slide in oil prices would prove CAD-negative.

Australian Dollar (AUD)


The Australian Dollar (AUD) suffered today despite US-China trade hopes improving dramatically over the weekend.

Instead, ‘Aussie’ investors are increasingly cautious due to fears over Germany’s increased coronavirus cases.

Fiona Cincotta of City Index said:

‘Even though the number of cases in Germany is low, the rise is unnerving. The markets will be watching developments closely here. Germany has been relatively successfully in keeping deaths low and reducing the spread quickly in the first wave, investors will need to this second wave nipped in the bud to boost optimism that a second wave won’t be as devastating the first.’

New Zealand Dollar (NZD)


The New Zealand Dollar (NZD) also struggled today with ‘Kiwi’ investors concerned of a possible second-wave of coronavirus cases in the Eurozone’s largest economy.

‘Kiwi’ investors are also concerned over the Reserve Bank of New Zealand’s policy meeting later this week. Any signs that the bank could retain interest rates at record lows of 0.25% would prove NZD-negative.

As of Monday, 22nd June 2020, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1079, GBP USD exchange rate was 1.2491, GBP AUD exchange rate was 1.804, GBP NZD exchange rate was 1.9249, GBP CAD exchange rate was 1.6879, and GBP CNY exchange rate was 8.8291.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

Live Exchange Rates