Based on $1 million
The Canadian dollar edged slightly higher Thursday morning after further favorable economic data was seen for the U.S.
U.S. nonfarm business productivity grew at a revised annual rate of 5.2 per cent from October through December, up from the 3.5 per cent pace previously estimated. Recent data has raised optimism that a global economic recovery is underway, which has helped support the loonie. Friday's U.S. and Canadian employment numbers will be a main focus, with more insight expected into the pace of the North American recovery. The loonie could still see further strength if the figures show strongly.
The U.S. dollar is down sharply against the Japanese yen, but has managed to hold its range against some of the European currencies after some volatility overnight. Fed Chairman Alan Greenspan spoke before the Senate Banking Committee and offered a somewhat rosier outlook for the world's largest economy, deviating from last week's guarded optimism.
The Japanese yen was higher against the greenback. The currency, which is up nearly five per cent in the past seven trading days, has been moving higher following a strong rise in the Nikkei 225, as well as on option-related stops on dollar-yen. Wedenday, signs that U.S. fund managers would increase their exposure to Japanese assets helped support the yen. Repatriation capital flows have also given a boost to the currency prior to the March 31 fiscal year end.
The U.S. dollar has managed to rebound from a dip against the British pound and euro Thursday morning. As expected, both the Bank of England and European Central Bank left interest rates unchanged at their respective meetings. ECB president Duisenberg stated that recent data confirms that interest rates are appropriate and pointed to improvement in economic conditions for the eurozone.
The Australian dollar was stronger against the U.S. dollar, rising to a two-month high after Aussie fourth quarter GDP figures came in almost double expectations at 1.3 per cent q/q. This brings the year over year pace to 4.1 per cent, making the Australian economy one of the fastest growing of the major countries. Further favorable U.S. economic data should also help the Aussie dollar, as the U.S. is the country's second largest trading partner. The Australian dollar has risen 2.8 per cent in the past month, making it the sixth best performing of the major world currencies in the past thirty days.
Christopher Scott, Ottawa Branch Manager Custom House Currency Exchange Ltd. 153 Sparks Street OTTAWA, Ontario K1P 5B5 CANADA (613) 234-6005 or Toll-Free 1-800-242-3147 (613) 234-6008 FAX Cscott@customhouse.com (Direct E-Mail) Ottawa@customhouse.com (Office E-Mail) www.customhouse.com (Web site)
