The U.S. dollar appreciated against the Canadian dollar Wednesday morning and was trading at 1.3160 by 11 a.m.

After positive developments in the U.S. job market, market participants are now focusing on Thursday's release of Canada's job market report. However, analysts do not believe that Thursday's data will come close to last week's U.S. employment data.

The Bank of Canada (BoC) will meet on April 13 to discuss a possible change in interest rates and the consensus among most analysts is a rate cut of 25 basis points. While Canada's economy has not shown sufficient signs of improvement, a recent U.S. industry report showed that U.S. employers intend to reduce layoffs in the upcoming months due to increased sales and profits. Since the U.S. is Canada's largest trading partner, the better economic outlook south of the border will benefit the Canadian dollar. An expanding U.S. economy will sooner or later lead to increased Canadian exports and support an economic expansion in Canada.

The euro rose against the Canadian dollar Wednesday morning and was trading at 1.5998 by 11 a.m. Germany, which represents a third of the Eurozone's economy, has released mixed signals about its economic development. While German unemployment in the month of March was at its highest level in a year, German manufacturing orders for the month of February rose for the eighth time in the last nine months. However, the increase was lower than analyst had expected. The euro, which has been on a downtrend against the Canadian dollar since the end of February, is expected to remain under pressure, since a rate cut by the European Central Bank (ECB) cannot be ruled out.

The British pound strengthened against the Canadian dollar Wednesday morning and was trading at 2.4213 by 11 a.m. Mixed economic signals are making it difficult for analysts to predict whether the Bank of England (BoE) will consider a change in interest rates this Thursday. While consumer borrowing and house prices are still up, British manufacturers see a slowdown in their business. The desired balance between domestic consumer spending and foreign demand has not been reached yet and a raise in the level of interest rates would possibly weaken U.K. consumer borrowing. However, higher interest rates are likely to strengthen the pound, making exports even more expensive for U.K. trading partners.

Market Report given by Roman Muhlbauer, Commercial Trader, Accu-Rate Corp.

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