CAD/JPY
Posted on April 28th, 2008 in Currency Analysis, RTT News | No Comments »
Canadian Dollar Falls From Multi-week Highs Against Most Majors [CAD/JPY]
4/28/2008 6:55:23 AM During early European deals on Monday, the Canadian dollar gave back the gains it posted in early Asian trading against other major currencies.
The loonie thus fell from a 7-week high against the yen, 3-week high against the euro, 1-week high versus the Aussie and a 5-day high versus the dollar.
Last week, the Bank of Canada slashed its benchmark interest rate by half a percentage to 3% on concerns about the impact of a slowdown in the U.S. economy. The interest rate cut was widely anticipated by analysts. This marked the bank`s second consecutive 50 basis point rate cut.
In its accompanying statement, the bank said that global economic growth has weakened due to the sharp slowdown in the U.S. economy and ongoing dislocations in global financial markets. Additionally, the Bank of Canada said that it now expects a deeper and more protracted slowdown in the U.S. economy, which it said has direct consequences for the Canadian economic outlook. The bank subsequently said it expects the Canadian economy will grow by 1.4 percent in 2008 before accelerating to 2.4 percent in 2009 and 3.3 percent in 2010.
In its monetary policy report released on Thursday, the Bank of Canada repeated the line from Tuesday`s statement noting that further monetary stimulus will likely be required in the medium term and also noted that the market, at least at the time of writing, had another 25bp of cuts priced in already.
In early trading today, the loonie showed advanced to a 5-day high of 1.0069 against the US dollar before reversing direction by about 8.10 pm ET. The pair that closed Friday`s deals at 1.0153 is now worth 1.0154. Against the euro, the loonie reached 1.5726 at about 8.10 pm Eastern Time, compared to 1.5846 hit late New York Friday. This set a 3-week high for the loonie. Thereafter, the loonie lost ground and is currently quoted at 1.5905.
German consumer confidence improved significantly in April, raising the forecast for May, results of a survey showed.
The Nuremberg-based GfK said its forward-looking consumer climate indicator is forecasting a value of 5.9 points for May, up from a revised 4.8 points in April. Initially, the April reading was forecasted at 4.6. Economists were looking for a reading of 4.5 for May.
During early Asian trading today, the Canadian currency hit a 1-week high of 0.9418 against the Aussie by about 8:45 pm ET. But the Aussie bounced back thereafter and is now trading near 0.9533.
The Loonie trended down against the Japanese yen in early European deals today. The loonie-yen pair is now worth 103.04, falling from a 7-week high of 103.97. The pair closed Friday`s North American session at 102.95.
The Ministry of Economy, Trade and Industry reported today that Japan`s overall retail sales rose 1.1% in March from a year ago. The increase marked the eighth straight month of gain. The report also showed that sales at large-scale retailers such as department stores and supermarkets increased an adjusted 0.2% on year. Copyright © 2007 RTTNews.com. All Rights Reserved.