The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate climbed in Tuesday’s North American session as investors digested the recent Reserve Bank of Australia (RBA) and Bank of Canada (BOC) statements.
The RBA shook markets when Governor Glenn Stevens suggested that there was room for further rate cuts in coming months as Sydney’s housing market continued to look ‘exuberant’.
Stevens stated: ‘Popular commentary is, in my opinion, too focused on Sydney prices and pays too little attention to the more disparate trends among the other 80% of Australia.’
‘That said, it is hard to escape the conclusion that Sydney prices – up by a third since 2012 – look rather exuberant.’
Meanwhile, Bank of Canada Governor Stephen Poloz suggested that the recent central bank cut in interest rates had created enough of an impact on the economy to perhaps avoid another rate cut entirely.
Poloz stated: ‘That amount (of rate cut) seems to be about right to restore our track for the Canadian economy for the next year or so and to get the output gap to close late 2016.
So that keeps our inflation objective on track to be on sustainable 2% inflation around the end of 2016. That implies… that the amount of insurance was just about the right amount.’
The Canadian Dollar has been extremely sensitive to falling oil prices in the latter few months, but with some experts suggesting prices appear to be bottoming out, the ‘Loonie’ exchange rate could be on its way up in coming months.
The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate could be in for an interesting day on Wednesday with the release of the Australian Consumer Price Index (CPI).
A fall in inflation could see the ‘Aussie’ sink against a host of other major currency peers including the Canadian Dollar; annual first quarter figures are forecast to slip from 1.7% to 1.3%.
The Canadian Dollar to Australian Dollar (CAD/AUD) exchange rate is trading at 1.0545. The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate is trending in the region of 0.9462.
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