Loonie Slips Slightly as Canadian Business Lending Conditions Ease in Q1
Overall business-lending conditions in Canada eased during the first quarter of 2012, following virtually unchanged lending conditions in the last quarter of 2011, according to the Bank of Canada’s Senior Loan Officer Survey (SLOS) results that were released today. The latest survey print eased to minus 16.9 in the first quarter of 2012 from minus 6.3 the previous quarter. The survey, conducted quarterly, collects information on the business-lending practices of Canadian financial institutions, and in particular, gathers the perspectives of respondents on price and non-price terms of business lending. Readings above zero indicate tightening credit terms while figures below zero signal easing conditions.
The survey revealed that price and non-price lending conditions eased across all borrower categories, most notably for small businesses, which saw six consecutive quarters of easing lending conditions. Competition among lenders was cited as the underlying factor in the easing of lending conditions, while an improving economic outlook boosted easing for small businesses. Additionally, the general consensus of respondents suggested that there was little evidence of increased demand for business credit during the first quarter of 2012.
USDCAD 1-minute Chart: April 09, 2012
Chart created using Strategy Trader – Prepared by Tzu-Wen Chen
The Canadian business outlook future sales print for the first quarter of 2012 was released at the same as the SLOS results. Despite improved optimism among Canadian businesses, the loonie weakened slightly against the greenback following release of the survey results. The Canadian dollar initially gained against the U.S. dollar in the first few minutes, but quickly erased gains to fall 6 pips in the following 20 minutes from pre-data release levels. At the time of this report, the USDCAD pair was trading at around 99.830 cents.
--- Written by Tzu-Wen Chen DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.