Pound Sterling to Canadian Dollar (GBP/CAD) Conversion Rate Predicted to Trend Statically after Positive Cameron Fails to Sustain Sterling Gains
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate declined by around -0.4% on Friday afternoon.
With a complete absence of domestic data to drive volatility today, and with trade quietening towards year-end, the Pound has seen little by way of movement today. In the early stages of Friday’s European session the Pound strengthened in response to a speech from Prime Minister David Cameron. After leaving the European Union summit in Brussels, Cameron suggested that talks regarding reforms to Britain’s membership with the EU have made good progress. However, the news wasn’t enough to sustain demand for the British asset which has steadily cooled since low inflation and weak wage growth weighed heavily on bets regarding the timing of a Bank of England (BoE) interest rate hike.
‘We have to respect what David Cameron has said and we have to respect some members’ needs,’ stated Donald Tusk, the EU council’s president. ‘Truly speaking we are absolutely sure we have to be tough with regard to some red lines and we will not give up on free movement or unfair discrimination, but today I know David Cameron is looking for a fair solution. To me the clearest message is that no one including David Cameron is ready to accept discrimination.’
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 2.0712.
Canadian Dollar to Pound Sterling (CAD/GBP) Exchange Rate Predicted to Hold Steady despite Weak Crude Prices
In a somewhat surprising outcome the Canadian Dollar has avoided a significant depreciation today despite a number of headwinds. US Dollar strength is likely to weigh on demand for the ‘Loonie’ (CAD) in the long-term as cross-border trade becomes less lucrative. Divergent policy outlook between the Bank of Canada (BOC) and the Federal Reserve is also likely to dampen demand for the Canadian Dollar. What’s more, crude oil prices have hit a fresh six-year low and futures show little sign of a speedy recovery with the global glut swelling.
On Friday Canadian inflation data failed to meet with expectations but the poor results had minimal impact on the ‘Loonie’. November’s Consumer Price Index came in at 1.4% on the year, missing the median market forecast 1.5%. On a monthly basis, November’s Consumer Prices unexpectedly contracted by -0.1%. Core Consumer Prices also failed to meet with expectations with November’s monthly reading unexpectedly contracting by -0.3%.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate dropped to a low of 2.0683 during Friday’s European session.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Hold Steady ahead of US Rig Count Data
Given the absence of further British and Canadian economic data the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is likely to continue to trend narrowly for the remainder of Friday’s European session. As the North American session progresses, however, there is the potential for ‘Loonie’ volatility in response to the Baker Hughes US Rig Count. Should the data show oil production has increased the Canadian Dollar is likely to decline versus its currency rivals.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate reached a high of 2.0864 during Friday’s European session.
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