Australian Dollar to Canadian Dollar (AUD/CAD) Exchange Rate Forecast to Soften on Canadian Inflation

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Twenty Australian Dollars (AUD)

The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate softened by around -0.41% on Thursday afternoon.

With oil prices falling and with market sentiment dampened amid geopolitical tensions, the Australian Dollar softened versus many of its major peers. The losses have been fractional, however, thanks to increased demand for gold.

The Canadian Dollar, meanwhile, strengthened versus many of its most traded currency rivals despite low oil prices. This is as a result of better-than-expected domestic data, with improved inflation showing that the recent rate cut has had a positive impact.

The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate is currently trending in the region of 0.9765.

Australian Dollar (AUD) Exchange Rate Softens on Market Sentiment

With oil prices declining amid rising output from the US, mounting concerns that Greece’s proposal for debt repayment won’t be accepted by all Eurozone governments, and with geopolitical tensions in Ukraine and Libya, trader risk appetite dampened considerably. As a result, the high-yielding ‘Aussie’ (AUD) softened versus many of its major competitors.

The losses have been slow, however, thanks to demand for gold. ‘Gold has been up during today’s trading, and we think this is mainly due to the Chinese being back in the market showing some stronger physical demand,’ Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said in a telephone interview. Yellen’s testimony eased concern that borrowing costs will rise soon, and ‘definitely helped gold,’ he added.

The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate dropped to a low of 0.9738.

Canadian Dollar (CAD) Exchange Rate Gains on Positive Data

Despite oil prices resuming declination, the ‘Loonie’ (CAD) advanced versus many of its major peers thanks to inflation data printing positively. The Consumer Price Index was forecast to rise from -0.75 to -0.4%, but the actual result increased to -0.2%. Additionally, the Core CPI eclipsed the median market forecast of a jump from -0.3% to 0.1%, with the actual result advancing to 0.2%.

The positive inflation data has caused traders to speculate that the Bank of Canada (BOC) will avoid cutting rates next week. ‘The still-meaty gains in core inflation strengthen the suddenly rising odds that the Bank of Canada will choose to stand aside next week,’ Doug Porter, chief economist at BMO Capital Markets in Toronto, wrote in a note to clients.

Australian Dollar to Canadian Dollar (AUD/CAD) Exchange Rate Forecast to Hold Losses

With market sentiment damp, and with a lack of influential data to curb the trend, the Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate is likely to hold losses for the remainder of Thursday’s trade.

Friday’s AUD/CAD trade will be dominated by changes in the commodities market thanks to an absence of significant domestic data for either nation.

The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate climbed to a high of 0.9840 today.

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