Canadian Dollar to Pound, Euro, US dollar: CAD Exchange Rates Head Higher
- Written by: Gary Howes
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Canadian dollar exchange rates remain stuck in tight ranges, particularly the GBP-CAD and the USD-CAD. The EUR-CAD has however seen some notable losses over the past 24 hours.
Wednesday morning in London is actually shaping up to be pretty hand for the Canadian unit while Tuesday saw little movement in the C$ complex. However, gains against the EUR have come amidst a broad decline for the shared currency (see 13:51 entry). On Wednesday morning we see:
The Canadian dollar to pound sterling exchange rate is a shade lower than where it was quoted last night. CAD-GBP is at 0.5428.
The Canadian dollar to US dollar is at 0.8979 and to the euro the rate has added a further 0.37 pct having reached 0.6500.
Note that our CAD quotes are mid-market rates; your bank will affix a spread at their discretion which prove to be incredibly uncompetitive. However, an independent provider will guarantee to get you as close to the market rate as possible, thus delivering up to 5% more currency. Please learn more here.
CAD to Euro: Good Gains
Why has the EUR suffered today? Jens Weidmann, the head of Germany's Bundesbank, has said the ECB could embark on a radical quantitative easing programme to boost the eurozone and ward off the threat of deflation.
Weidmann today said:
"The unconventional measures under consideration are largely uncharted territory. This means that we need a discussion about their effectiveness and also about their costs and side-effects.
"This does not mean that a QE programme is generally out of the question but we have to ensure that the prohibition of monetary financing is respected."
Commentators say Weidmann's words mark a significant softening of Germany's stance to QE. With regards to currencies, simply put currency strength and QE don't sit well together!
USD vs CAD: Tight ranges
Commenting on the USD-CAD is Stephen Gallo at BMO Capital:
:We expect the range in USDCAD to tighten up heading into tomorrow, especially in light of the further short CAD covering seen yesterday. Key valuation metrics do not indicate that the pair is overly stretched to the topside at this stage (spot ref: 1.1205), and decent support and resistance levels are clustered on either side of spot (1.113-1.120 and 1.1275-1.130 respectively).
"Key interest rate differentials are still supportive of USDCAD, but there is a risk that further tepid US data this week knocks those spreads and the USD a bit further back towards their pre-FOMC levels."
Canadian dollar to pound: Rally over?
Meanwhile the GBP-CAD rally remains stuck in a rut. We don't expect any major moves for this currency pair at present.
According to Shaun Osborne at TD Securities, the rally is at risk of looking too mature now:
"GBPCAD has been struggling against resistance at 1.8645 over the past two months, leaving the GBP looking perilously close to support at 1.8396. We are still more inclined view the outlook here as bullish overall—the strong bull trend here re- mains deeply entrenched on the longer-term charts, at least.
"And the daily set up remains potentially bullish—the wedge pattern the market is confined to is tightening and usually resolves in the direction of the underlying trend. But the time for a break out is now, otherwise the formation will start to look too mature and that may mean more sideways range trading and pressure on support just under 1.84. That might leave the GBP ex posed to a test of 1.8284, the neckline of a quadruple top."
