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The Canadian dollar is making broad-based gains on Wednesday afternoon following the release of weekly Energy Information Administration (EIA) inventory figures.
Crude oil prices were under pressure earlier in the day despite stockpiles having decreased by 5828k barrels in the week ending Sept. 5 against expectations for a drop to 3500k. West Texas Intermediate crude oil [...]
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Published on September 4, 2008 by Forex
The Canadian dollar is taking advantage of broad-based euro losses on Thursday on the heels of the European Central Bank’s decision to hold rates at 4.25%.
In his post-decision press conference, ECB President Jean-Claude Trichet repeated that the current monetary stance adopted by the bank will contribute to achieving its objective of price stability. Trichet also said the ECB is never pre-committed and will do what is necessary to reach its objective. Despite the hawkish comments, the euro sold off against all major foreign currencies and is now down 0.0105 to 1.5300 against the Canadian dollar.
CMC Markets chief FX strategist Ashraf Laidi said the dramatic drop in the currency is because of market preoccupation with the projected drops to real euro zone GDP. In 2008, growth is now projected to be between 1.1% and 1.7%. In 2009, GDP is projected to be between 0.6 and 1.8%. The euro zone’s GDP in 2007 was 2.6%.
“ECB President Trichet maintained his unambiguously hawkish language on inflation, but markets are largely focusing on the ECB’s growth downgrades for the Eurozone. This bolsters the possibility of an eventual ECB easing in H2 2009,” Laidi wrote. “Euro downward bias remainsÂ¥”
In other crosses, the pound sterling is down 0.0021 to 1.8861 against the Canadian dollar. The loonie, in turn, is down 0.355 points to 101.5500 against the yen and up 0.0035 to 1.1292 against the Australian dollar.
The Canadian dollar is down 0.0008 to 0.9402 against the U.S. dollar in a particularly volatile day of trading, which has seen the CAD/USD trade between 0.9374 and 0.9482. The Canadian dollar dropped to session lows following a rebound in the ISM non-manufacturing composite index at 10 a.m. EDT.
