The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate softened by around -0.42% during the European session.
With market sentiment significantly dampened amid geopolitical tensions in Europe, the high-yielding Australian Dollar declined versus the majority of its most traded currency rivals. Additional declination can be attributed to low oil and iron ore prices.
The Canadian Dollar, meanwhile, softened versus many of its most traded currency rivals after January’s Gross Domestic Product cooled, albeit modestly. Low crude prices also weighed on the commodity-correlated asset.
The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate is currently trending in the region of 0.9662.
In addition to the geopolitical tension between Greece and the Eurozone causing dampened risk-appetite, the ‘Aussie’ (AUD) has seen declination as a result of low iron ore prices. As a commodity-correlated asset, the Australian Dollar is sensitive to the commodities market. Despite recent low prices in commodities, the Reserve Bank of Australia (RBA) are still frustrated at ‘Aussie’ overvaluation, and could be set to cut rates in the next policy meeting.
‘The RBA seems more concerned about the renewed weakness in commodity prices led by iron ore,’ Barclays chief economist Kieran Davies said. ‘With commodities slumping again and the currency only partly reflecting that, you’ve got a gap opening up again between the currency and the terms of trade and I think that’s been a persistent source of frustration for the RBA.’
The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate dropped to a low today of 0.9654.
Similarly to that of the Australian Dollar, the ‘Loonie’ (CAD) is sensitive to commodity prices. The recent low oil prices have weighed on demand for the Canadian asset. The declination has been slowed somewhat, however, thanks to tracking US Dollar gains.
A modest decline in Canadian growth aided the ‘Loonie’ downtrend. January’s Canadian GDP showed growth of 2.4% on the year, down from the previous growth registered of 2.8%. On the month, January’s GDP declined by -0.1%.
‘Overall, while the first quarter will likely still be no better than one per cent growth, the issue for monetary policy will mostly be about how much of that weakness extends into the subsequent two quarters,’ stated CIBC chief economist Avery Shenfeld.
Although both currencies are commodity-correlated, the Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate is likely to hold losses for the remainder of the European session. This is as a result of dampened market sentiment weighing heavily on the ‘Aussie’, and with the ‘Loonie’ able to track US Dollar gains.
The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate climbed to a high today of 0.9719.
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