Over the last couple of weeks the Canadian economy has been showing slight signs of improvement. The first sign was from CAD CPI figures mid April, these showed a dramatic increase in the inflation rate. The reading came in at 1.5% from a previous figure of 1.1%. Canada typically targets 2% inflation per annum, so this release was certainly a move in the right direction
Another strong signal came from the Retail Sales release, which showed better than expected growth. This indicates that there are better levels of consumer confidence and also an increase in domestic activity. Last night we had better than expected figures for Canada’s GDP performance. The release showed a figure of 2.6% against expectations of 2.5%. Although last month’s figure was a steady 2.6% as well, the market still reacted on a slight positive note to the recent news.
Going forth tonight we have Canadian manufacturing PMI data set to be released 11.30pm EST. There are no specific expectations as of yet, however the figures are still in a state of expansion as last month’s figure was above the expected 50, at 53.3. So depending on what official figure is released tonight we could see further movement on the AUD/CAD pairing.
Tomorrow we will see New Homes Sales data out from Australia. Again, there is no expectation for this figure; however the data generally has the capacity to move exchange rates if the released figures deviate from the previous month’s figures.
The AUD/CAD pair seems to be diverging on parity again, although the next few weeks will have a lot to say on whether that happens, or not.