GBP/CAD Exchange Rate Trending Higher ahead of UK Employment Data Today
After a surge in demand for the US Dollar (USD), as the case for a December Fed interest rate rise strengthened, sentiment towards the ‘Loonie’ (CAD) began to weaken once more yesterday afternoon. With traders optimistic ahead of the day’s UK employment data the GBP/CAD exchange rate is on an uptrend in the region of 2.0097.
Earlier…
Although the International Energy Agency (IEA) has projected that oil prices will not substantially recover until 2020, the GBP/CAD exchange rate has entered a downtrend thanks to trader profit taking.
Canadian Housing Starts Shortfall Diminishes Appeal of Canadian Dollar (CAD)
While demand for the Pound (GBP) has been relatively muted as a result of last week’s Bank of England (BoE) unexpected dovishness, the currency was shored up on Monday as a result of comments from the Organisation for Economic Co-operation and Development (OECD). Suggesting that the UK economy would benefit from an increase in interest rates in the early months of 2016, this report saw traders buying back into Sterling on hopes that domestic policymakers could be prompted into moving sooner rather than later.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was bolstered further by the release of the latest Canadian Housing Starts figure. Construction on new houses fell short of forecast, showing a particularly sharp decline from 231,600 to 198,100, to evidence continued slowness within the local economy. With both the Canadian housing market and construction sectors demonstrating weakness the ‘Loonie’ (CAD) was equally weighed down by the continuing slide in oil prices.
Pound (GBP) Positive in spite of UK Retail Sales Slump, Canadian Dollar (CAD) Buoyed by Profit Taking Today
Last night’s British Retail Consortium (BRC) Like-for-Like Sales figure was not of an especially encouraging nature, as retail demand slumped sharply in October from 2.6% to -0.2%. However, despite this particularly poor showing traders were reassured by the implication that shoppers had been inclined to hold off on purchases ahead of the Black Friday discounts. Hopeful that sales would pick up substantially in November, this kept the Pound on a more positive footing against rivals early on Tuesday morning.
The annual International Energy Agency (IEA) report has rather weakened the appeal of oil today, with the IEA predicting that crude prices will likely not return to the region of $80 per barrel until 2020. Suggesting that the present supply glut will persist for some time yet as global demand continues to wane, this saw Brent crude slumping heavily in the range of $47.13. In spite of this, however, the GBP/CAD exchange rate has entered a downtrend as investors appear to be engaging in a fresh round of profit taking on the commodity-correlated currencies.
GBP/CAD Exchange Rate Forecast: Increase in UK Average Weekly Earnings Predicted to Rally Pound
Wednesday’s raft of UK employment data could trigger a resurgence for Sterling, though, with Average Weekly Earnings expected to show a sustained increase on the month as Jobless Claims Change is forecast to show a decrease in the number of new claims for unemployment benefit. A strong showing here could well advance the case for the BoE to raise interest rates in the nearer-term.
The Canadian New Housing Price Index, set for publication on Thursday, could offer some greater support for the ‘Loonie’. However, if the present trend of negative housing data continues the Canadian Dollar could soften more considerably.
Current GBP, CAD Exchange Rates
At time of writing, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was on a slight downtrend around 2.0047, while the Canadian Dollar to Pound Sterling (CAD/GBP) pairing making gains in the range of 0.4983.
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