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Canadian Dollar to US Dollar Exchange Rate Climbs From 4 ? Yr Low & CAD Currency Gains vs Pound Sterling, Euro & AUD Dollar

March 21, 2014 - Written by Toni Johnson

The Canadian Dollar to US Dollar exchnage rate (CAD/USD) climbed away from its lowest level since 2009 and edged higher against a number of peers including Pound Sterling (CAD/GBP), Euro (CAD/EUR) and Australian Dollar (CAD/AUD).

Earlier in the week the ‘Loonie’ was hit hard by comments made by Bank of Canada Governor Stephen Poloz who said that he wouldn't rule out cutting interest rates if the North American nation’s economy weakened. He also lowered his growth forecasts for the first part of this year.

As a result the Canadian currency has been one of the worst performing major currencies so far this year against the US Dollar. Weakness was also exacerbated by worries over falling inflation and a weakening domestic economy.

Worries over the situation in Ukraine also had an impact as risk aversion diverted investors away from the riskier commodity based currency.

Today the ‘Loonie’ recovered ground after data showed that consumer price inflation in Canada rose by 0.8% last month, beating expectations for a gain of 0.5%. The figure added to the previous month’s rise of 0.2% easing concerns over falling inflation.

Concerns over Canada’s domestic economy were also put at ease after retail sales increased more than forecast in January.

The Canadian Dollar’s gains could be short-lived however as investors look ahead to next week’s anticipated Chinese manufacturing data. If the report shows a further disappointing figure then we can expect the market to experience volatility and see demand for safe haven currencies such as the Japanese Yen and Swiss Franc rise at the expense of other currencies such as the Australian and Canadian currencies.


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