Daily Currency Update
CAD - Canadian DollarDemand for the US dollar edged lower against its major counterparts after another indicator showed inflation rose again in May, which helped boost the Canadian dollar this morning. USDCAD was down 0.26% to 1.2289 at the time of writing. The Personal Consumption Expenditures (PCE) Price Index, climbed to 3.9% from 3.6% on an annual basis, compared to expectations of 4%. The PCE index measures the change in the price of goods and services purchased by consumers, excluding food and energy. On Thursday, domestic data showed confidence among exporters has climbed to its highest level in more than two decades. Export Development Canada’s Trade Confidence Index jumped 19% from the end of 2020 to the middle of 2021. CAD has benefited from the surging demand for oil - one of Canada’s major exports - as the global economy reopens.
Key Movers
Positive economic data continued to be released from the Eurozone, which has been a boost for the euro. The German Gfk Consumer Climate indicator was released on Friday morning, posting a figure of -0.3%, which is the highest level since August 2020. The euro strength could continue as the European council meeting later plays out. EURUSD was up 0.28% at 1.1963 at the time of writing.On Thursday Bank of England Governor Bailey gave no indication that the monetary policy committee (MPC) are planning on changing interest rates in the short term. The pound fell by 0.4% against the US dollar and hit session lows of 1.3888 yesterday. Bailey suggested that there is no issue with inflation sitting above the 2% target, and it might even reach 3% for a temporary period. The pound was only down 0.04%, trading at 1.3912 this morning. The Australian dollar broke above 0.76 US cents this morning, continuing to recover from last week’s dramatic dip. With little of note on the domestic macroeconomic ticket, the direction was again driven by the shifting reflation narrative. AUDUSD was up 0.38% to 0.76108 at the time of writing.
Expected Ranges
- GBP/CAD: 1.7084 - 1.7169 ▼
- AUD/CAD: 0.9333 - 0.9359 ▲
- USD/CAD: 1.2289 - 1.2338 ▼