Canadian Dollar (CAD) Exchange Rate Steady; Bank of Canada Interest Rates Stagnate
The Canadian Dollar is trading lower against the US Dollar on Wednesday, currently trading at 0.9295.
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The ‘Loonie’ has seen the day’s high at 0.9305 and low of 0.9282 so far this session.
The Canadian Dollar has experienced a highly influential day on Wednesday with the announcement from the Bank of Canada to maintain their current interest rate, which has stagnated at 1.0% for the past four years.
The Bank of Canada stated: ‘The bank is neutral with respect to the timing and direction of the next change to the policy rate, which will depend in how new information influences the outlook and assessment of risks.’
The current exchange rate for the ‘Loonie’ in the 92 cents region is comparably quite low compared to the 94 cents it had been hovering by in recent weeks.
Economists speculated that the 94 cents ‘Loonie’ was ‘uncomfortably’ high, however, with the US Dollar likely to gain in upcoming weeks the Canadian Dollar has seen a dip.
The ‘Loonie’ has also been trading lower in anticipation of the Bank of Canada’s interest rate decision, however with the decision to maintain the 1.0% interest rate the Canadian Dollar looks likely to remain steady.
Representative for RBC Dominion Securities, Mark Chandler, commented about his hopes for the Bank of Canada’s interest rate decision.
He stated: ‘We will also be looking for any comments about the recent strengthening of the Canadian Dollar and the risks it may pose for their assumption of strengthening exports.’
Furthermore, Wednesday has seen the release of positive Manufacturing Shipments data for Canada, increasing by 1.6% in May.
The CAD/USD exchange rate however will expect to see fluctuations after the Federal Reserve’s chairwoman, Janet Yellen, embarks on her second day of speaking today, making her Semi-Annual Testimony to the House Committee.
Chandler commented: ‘While much of the impact of the semi-annual address has waned with the (Fed) now providing quarterly forecast updates, we would expect some questions on the timing of future rate increases. Also on Wednesday, the (Fed’s latest regional economic survey) will be released and should, on the basis of recent job figures, be a relatively upbeat compendium of economic conditions.’
Wednesday has also seen the US publish June’s Industrial Production data which has disappointed at only 0.2%, despite forecasts of 0.3%.
It appears that the CAD/USD currency pair may be likely to fluctuate throughout the rest of the week as the US releases Jobless Claims and Continuing Claims data on Thursday and Consumer Confidence on Friday.
However Canada could see an interesting latter half of the week also with Consumer Price Index data released on Friday.