Widespread Sterling gains may have occurred in response to further leading statements from a Bank of England official regarding the timeline for raising interest rates, but the GBP to CAD exchange rate was stagnant on Monday.
The Pound began the week riding high against its peers thanks to a combination of last week’s upbeat assessment of the UK economy by the National Institute of Economic and Social Research, encouraging domestic manufacturing data and leading comments from BoE Governor Mark Carney.
The British asset was pushed higher still after Carney’s Deputy, Charlie Bean, also advocated the case for an interest rate increase taking place before early next year. Bean has previously intimated that the BoE must begin increasing interest rates now if it hopes to stick with a gradual, measured timeline and today commented that a hiking in borrowing costs ‘will be a symbolic step, because it will be an indication that we are on the road back to normality. I would welcome us getting on to the path of normalisation, as a demonstration that the economy is healing’.
However, the Pound’s relationship with the ‘Loonie’ was lacklustre and barely any movement was registered after economic reports for Canada were published. Firstly, Canada’s international securities transactions came in at 10.13 billion Canadian Dollars in April, up from a negatively revised -1.41 billion Canadian Dollars in March.
This news was followed by a report detailing the largest domestic sales gain for almost four years.
According to figures compiled by the Canadian Real Estate Association, home sales jumped by 5.9 per cent in May, month-on-month, with average home prices being up 7.1 per cent on the year.
CREA’s chief economist asserted; ‘Had it not been for such a brutal winter that delayed the launch of the spring market, the improvement in new listings and sales would likely have been more spread out over the past few months.’
While the Canadian Dollar was little-changed against the Pound it was able to advance on the US Dollar after the International Monetary Fund negatively revised its growth forecasts for the US.
As the week progresses the main Canadian reports to be aware of include Wednesday’s wholesale sales figures and Friday’s domestic consumer price inflation data.
Economists have forecast that consumer prices in Canada rose by 0.3 per cent in May, month-on-month, and were up 2.1 per cent on the year. Canada’s retail sales report is also due out on Friday. As a month-on-month sales gain of 0.6 per cent is expected, a disappointing result could wear on the ‘Loonie’.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,
,Pound Sterling,0.5423,
Canadian Dollar,,US Dollar,0.9215,
Canadian Dollar,,Euro,0.6799,
Canadian Dollar,,Australian Dollar,0.9813,
Canadian Dollar,,New Zealand Dollar,1.0617,
US Dollar,,Canadian Dollar ,1.0860,
Pound Sterling,,Canadian Dollar,1.8443,
Euro,,Canadian Dollar,1.4722,
Australian Dollar,,Canadian Dollar,1.0190,
New Zealand Dollar,,Canadian Dollar,0.9431,
[/table]
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